Important book out next month: http://www.myspace.com/academicrepression
CONTRIBUTORS TO THE BOOK: William Armaline John Asimakopoulos Bill Ayers Liat Ben-Moshe Michael Bérubé Carl Boggs Marc Bousquet A. Peter Castro Ward Churchill Dana Cloud Sumi E. Colligan Maria E. Cotera Christian Davenport Victoria Fontan Takis Fotopoulos Henry Giroux Adam Habib Joy James Robert Jensen Richard Kahn Caroline Kaltefleiter Doug Kellner Mark LeVine Bill Martin Micere M. Githae Mugo Mechthild Nagel Cary Nelson Michael Parenti Emma Perez Mark Rupert Rik Scarce Deric Shannon Stephen Sheehi Amory Starr Gregory Tropea Ali Zaidi Howard Zinn -----Original Message----- From: ehrbar <[email protected]> To: [email protected]; [email protected] Sent: Thu, 26 Mar 2009 6:44 pm Subject: [Pen-l] Computable General Equilibrium Models and Climate Change ncluded at the end here is an email from the Sutherland Institute, a onservative think tank in SLC, claiming that many jobs will be lost ue to cap and trade. They cite the following report ttp://www.beaconhill.org/BHIStudies/WCI-2009/WCIReportFinal090323.pdf just skimmed through this report to see how they get their results; hey are using a Computable General Equilibrium (CGE) Model called TAMP (State Tax Analysis Modeling Program). This is a complicated athematical procedure that has become the vogue in economics, a brief ym pathetic overview is for instance at ttp://www.ictp.trieste.it/~eee/workshops/smr1541/Peterson3.pdf ut Peter Dorman is questioning whether these models have a track ecord of correct predictions: here is a posting at Econospeak: ttp://econospeak.blogspot.com/2008/06/challenge-on-cge-modeling.html Other than their track record, what theoretical critiques exist of CGE odels? In order to explain what a CGE does, I am trying to use the ollowing imagery (please tell me if this is right, I have never orked with a CGE): Use the basic things about market clearing and udget constraints you have learned in a principles of microeconomics lass, and feed them into a computer together with real data, with the omputer assuming everybody is a price taker and the economy is close o an equilibrium, looking at many markets at once and making sure the udget constraints are met. The predictions based on this paradigm re the predictions of a CGE. Is this a fair characterization? What is wrong with these models, and can they be done correctly? One ine of critique seems to be the article by Martin Weitzman at ttp://www.economics.harvard.edu/faculty/weitzman/files/REStatFINAL.pdf hich says that optimal control theory and Cost Benefit Analysis ssumes that the damage functions have thin-tailed probability istributions, while catastrophic climate change is a thick-tailed utlier. If you ignore this fact you get misleading results. Another uite different line of critique is that climate policy models must ork with induced technological change as opposed to "manna from e aven" technological change, look at chapter 38 in ttp://www.defra.gov.uk/environment/climatechange/research/dangerous-cc/pdf/avoid-dangercc.pdf These are some possibilities I have been thinking about, but I have he impression that far not enough is being done in this direction. he climate change deniers are using bad neoclassical economics, and hose who are concerned for the sake of future generations do not have he theoretical tools to de-bunk their bad economics. So we tend to hrow out cost benefit analysis and CGE models altogether, instead of ntering the debate and telling them where their mistakes are and how t should be done right. The book by Revesz and Livermore, "Retaking ationality: How Cost-Benefit Analysis Can Better Protect the nvironment and Our Health", OUP 2008 argues that CBA is being misused nd that we should use CBA in the right way. Can one also argue that GE models are being misused? Is it possible to use them in the right ay? Thank you for reading and for your thoughts. Hans. ------ Start of forwarded message ------- ate: Thu, 26 Mar 2009 15:38:19 -0400 (EDT) rom: Sutherland Institute <[email protected]> ubject: Sutherland Institute - March 26, 2009 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ March 26, 2009 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ WESTERN CLIMATE INITIATIVE AP-AND-TRADE INITIATIVE IMPOSES DRASTIC COSTS tah would be one of the hardest hit; thousands of jobs and millions of dollars n the line new economic study appears to con firm earlier findings that a Western carbon ap-and-trade cheme would destroy hundreds of thousands of jobs, and erode personal income or illions of citizens in the Western United States. For Utah, this could mean as many as 9,900 net jobs lost. he newly released study, by the Beacon Hill Institute of Suffolk University in oston, comes on the heels of research conducted by the Western Business oundtable eleased a few weeks ago which also found that the WCI plan could seriously amage he West's economy, if implemented in its present form. Four Canadian provinces and seven western states are full participants in WCI: California, Arizona, New Mexico, Oregon, Washington, Utah, and Montana. he BHI study found that, if under a scenario in which 100 percent of greenhouse gas emission permits were auctioned off to emitters in a cap-and-trade scheme, he seven states would: Lose from 103,931 to 251,674 private sector jobs, while the permit would allow the state to hire 57,269 to 142,241 state employees; Put firms' investment at serious risk by slowing investment in the region by 548 illion to $1,448 million; Diminish total personal income, by $6.36 billion to $18.31 billion per year; he negative economic effects stem from price and tax increases the states would impose on their respective energy and transportation sectors. A cap on carbon missions is effectively a tax on energy production that is passed to industry, usinesses and consumers, that would likely drive commerce and jobs to other tates r countries. eacon Hill found that none of the seven WCI states would escape economic harm f he cap-and-trade was imposed. Utah could lose as many as 9,899 of net jobs, 1.84 illion in personal income, and $743.32 of annual disposable income for a family of four. The WCI is the worst sort of government planning, but its ill-effects would be ypical. It creates a crisis out of thin, and evidently warmer, air and then reates olutions to address problems that don't exist. That's not policy, let alone ound olicy. It's a case of good, if fanciful, intentions gone awry," said utherland resident Paul Mero. he complete study is available at ttp://www.beaconhill.org/BHIStudies/WCI-2009/WCIReportFinal090323.pdf ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ------ End of forwarded message ------- Hans G. Ehrbar http://www.econ.utah.edu/~ehrbar [email protected] conomics Department, University of Utah (801) 581 7797 (my office) 645 Campus Center Dr., Rm 308 (801) 581 7481 (econ office) alt Lake City UT 84112-9300 (801) 585 5649 (FAX) ______________________________________________ en-l mailing list [email protected] ttps://lists.csuchico.edu/mailman/listinfo/pen-l
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