To be fair James, the "wibble" on Grist that humans (and most life on earth) tends to be well-adapted to current climates, and that rapid climate change would severely damage natural systems and impose potentially large costs on the economy, has fairly strong support in the literature. We can quibble over the term "optimal", but it seems clear that under most scenarios anthropogenic warming will have widespread negative effects vis-a-vis the status quo.
>From my perspective as an economist, your article seems somewhat uncontroversial. It is a basic explanation of an environmental externality, and an argument that correcting the externality would be more socially-optimal than allowing it to continue. I have yet to meet an economist who would seriously disagree with this broad statement (and for a list of eminent economists spanning the political spectrum who have explicitely supported such a position, see Greg Mankiw's Pigou Club: http://gregmankiw.blogspot.com/2006/09/rogoff-joins-pigou-club.html ). The more interesting argument, from an economic perspective, is what the costs of abatement will be, what the costs of climate change will be, what type of mechanism is best for catalyzing abatement (e.g. taxes, tradable permits, or hybrid systems), and what discount rate should be used in calculating future costs of climate change. Measures taken to reduce greenhouse gas emissions will reduce consumption (and thus "hurt" the economy). However, if the cost of abatement is less than the damages associated with unmitigated climate change, abatement would have a net positive effect on the economy. There are a wide range of estimates of the cost of abatement, ranging from bottom-up optimistic estimates that investments in abatement would effectively cost nothing due to efficiency opportunities currently ignored (primarily models developed by engineers) to more pessimistic top-down macroeconomic models (usually developed by economists) that show a wide range of potential costs (from 0.5% of annual GWP to over 10% of GWP). See, for example, this assembly of different models from chapter three of the Stern Review: http://i81.photobucket.com/albums/j237/hausfath/CostofAbatement.jpg . Estimates of the costs of climate change also differ widely, with economists such as Robert Mendelsohn and Bill Nordhaus estimating relatively low damages and Nicholas Stern estimating high damages (~12 percent of GWP). Here many issues come into play, such as the calculation of non-use values (the existance of species, for example) and the value of ecosystem services. Similarly, equity weighting becomes an important issue, so that the damages to the most vulnerable countries are not marginalized simply because those countries have a low GDP. The decision on how much to discount the future will fundamentally shape any estimates of the future cost of climate change, to the point where the choice of discount rate matters more than any other factor. There is a robust debate among economists and philosophers on the correct way to discount the future, and you can see the appendix at the end of chapter two of the Stern Review for a good overview: http://www.hm-treasury.gov.uk/media/9/A/Chapter_2_Technical_Annex.pdf . Finally, the choice of economic mechanisms matters quite a bit. Tradable permit systems with a fixed cap risk unacceptably high costs if abatement proves more expensive than anticipated over the short term. Similarly, taxes can allow unacceptably high climate damages if the marginal damage curve for climate change is highly convex. For good background on the relative merits of each of these systems, see Billy Pizer's Prices vs. Quantities: The Case of Climate Change, http://search.rff.org/custom/cs.html?charset=iso-8859-1&url=http%3A//www.rff.org/Documents/RFF-DP-98-02.pdf In reality, the only way that measures to tackle climate change could hurt the economy would be if the abatement measures were too ambitious (and thus more costly than the damages of unabated emissions) or if the cost of climate change proves lower than expected. There is a healthy ongoing debate in the economics community about the damages of climate change, the cost of abatement, and the best mechanisms to achieve abatement. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups Global Change ("globalchange") newsgroup. Global Change is a public, moderated venue for discussion of science, technology, economics and policy dimensions of global environmental change. Posts will be admitted to the list if and only if any moderator finds the submission to be constructive and/or interesting, on topic, and not gratuitously rude. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/globalchange -~----------~----~----~----~------~----~------~--~---
