Posted by Jonathan Adler:
Taylor and Van Doren on Intergenerational Equity:
http://volokh.com/archives/archive_2006_11_19-2006_11_25.shtml#1164386730
Responding to the Stern Review, Jerry Taylor and Peter Van Doren of
the Cato Institute argue that adopting measures to stabilize
greenhouse gas emissions is not (yet) a good deal for us or future
generations.
Not to be flip about it, but why should the relatively poor (us)
sacrifice for the relatively rich (our children and grandchildren)?
The Stern Report argues that the emissions cuts necessary to stave
off disaster will likely cost about 1 percent of global GDP every
single year, or about $1,154 in current dollars per household in
the United States. A small price to pay, we're told, when GDP
losses will likely total 5-10 percent of global GDP every year if
we do absolutely nothing.
But even with a 10% reduction in GDP relative to what it would have
been, 100 years from now, people will still be extraordinarily well
off by current standards. For example, since 1950 real U.S. GDP per
capita has increased by about 2% a year. Given that growth rate,
real GDP per capita one hundred years hence would be $321,684, or
more than 7 times higher than it is at present ($44,403). If global
warming cuts GDP by 10% a year beginning about 50 years from now,
then GDP per capita will be $289,515 in 2106 rather than $321,684.
Would anyone, let alone liberals, ever propose a 1% tax on those
who make $44,000 to create benefits for those who make $289,000? In
short, paying now to head off warming is a regressive
intergenerational tax that takes from the poor and gives to the
rich.
Nobel alreate economist Thomas Schelling has often made a similar
point, arguing that intergenerational equity need to account for the
likelihood that future generations (particularly in the developing
world) are likely to be significantly wealthier than current
generations.
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