> Stern uses a logarithmic utility, where 10% of a poor person's salary is > worth the same (in terms of overall global utility) as 10% off a rich > person's. There are arguments about how plausible this curve is, > especially in combination with the negligible discount rate. I don't > think anyone claims that the world works like this, but Stern asserts > that the world _ought_ to behave like this.
http://heikoheiko.blogspot.com/2006/07/economic-benefits-of-minimum-wage-laws.html The beauty of this economic modelling technique is that it shows the value of redistribution. While taxing the rich may reduce GDP, it may simultaneously raise total welfare, at least when adjusted for logarithmic utility. The reason this type of model gets applied to climate change and not to the more obvious redistribution is I think the blame component and nationalism, roughly speaking it seems that it's a lot more ok to spend $10 to avoid killing Bangladeshis through reduced climate change than it is to just hand them $10, even if that'll save ten times as many people. Economic models might say that taking $10000 from each American earning more than $30000 per year and giving it to Indians making less than a Dollar a day would be hugely beneficial for total global welfare, but it's an awfully tough sell, well at least as far as making the case to American voters is concerned ... --~--~---------~--~----~------------~-------~--~----~ 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 -~----------~----~----~----~------~----~------~--~---
