(Supposed to be like “Khaaaaaaan!”)
My latest Mises CA post takes on the typical claim that “uncertainty” bolsters the case for government restrictions on carbon emissions. Plus, I work in a Captain Kirk reference. Some excerpts:
So what these researchers have formally shown, is that if you assume this shape of a damage function, but you are unsure of exactly where the curve is, then the mathematical expectation of “damage from a given amount of warming” is higher, the more uncertain we are about the exact position of the curve, other things equal. Or, supposing we know exactly what the damage function is, but we aren’t quite sure how much an additional ton of CO2 emissions will physically contribute to global warming, then the mathematical expectation of the damage (in dollars) from emitting that ton will be higher, if we have the same mean but more variance in our estimate.
Now that we understand the intellectual adventure, what can we conclude? It is simply building in the conclusion the authors wanted. Analysts could easily flip their arguments about uncertainty upside down to get the opposite answer. What if, for example, under “business as usual” the Earth would have significantly cooled, thus moving up the left-side of the stipulated “convex damage function”? In other words, as Earth approached another ice age, the damages from further cooling would be higher and higher. In such a scenario, human activities that trapped heat would be a blessing, deserving of government subsidies, not taxes (in the conventional Pigovian framework).
My question: Why couldn’t we apply the same reasoning to ANY THREAT AT ALL? There are killer asteroids, alien invasions, superflus, nuclear war, earthquakes, and on and on it goes. Why not, for example, have governments restrict the emission of radio waves, on the off-chance that too much “noise” will attract the attention of aliens who will conquer us? You might argue that we are really uncertain about the nature of such a threat, but hey–that just shows all the more why we need to cut radio wave emissions by 80% relative to 2005 levels.