Twenty-two years after economist Julian Simon won his historic bet with enviro-doomsayer Paul Ehrlich over whether the price of five scarce metals would rise or fall — Simon won because, as he had forecast, prices fell substantially (because known reserves increased) over the period 1980 to 1990 — Nigel Lawson, one of Margaret Thatcher’s two great finance ministers, won a similar bet over the Kyoto Treaty with Cameron Cabinet Minister Oliver Letwin.
The bet was made in the course of a debate between the two men, both leading Tory intellectuals, over Kyoto and global warming in the July 2008 issue of Standpoint. Benny Peiser takes up the story:
Oliver Letwin: Nigel can’t know whether there is going to be a successor to Kyoto.
Nigel Lawson: Well, look, there’ll be an international agreement in the sense that there will be platitudes. The acid test is: will there be an agreement to have binding cutbacks for all participants on their carbon emissions? Instead of arguing about it, we could have a wager on it.
Oliver Lewtin: I’d be very happy to have a wager, and I offer you a £100 bet that before either of us is dead, whichever is the first — our estates can pay — we will see a very substantial agreement on carbon reduction.
Nigel Lawson: But I don’t think I want the bet to be “in my lifetime” because I’d like to get the £100. I’m sorry it’s such a modest amount you’re prepared to wager — it shows how unconfident you are — but I would like to be able to collect before I die. So I think we should say “by the time Kyoto runs out”, because there is meant to be no hiatus; there is meant to be a successor to Kyoto. So “by 2012 we will have the agreement” — maybe I’ll die before then, of course —but 2012 is the acid test.
2012 ran out two days ago, as did the original Kyoto agreement. No new international agreement on CO2 emissions has replaced it. Meanwhile Canada, Russia, and New Zealand have officially left Kyoto while Belarus, Ukraine, and Kazakhstan threaten to do so as well. Oliver Letwin, like the gentleman he is, has now conceded that Lawson has won the bet. So this story ends well.
Lawson’s bet always looked a good one because it reflected economic realities. But how many bets do realists such as Simon and Lawson have to win before the world listens to them rather than to romantic intellectual doomsayers?