Many Climate Economists Don’t Believe Climate Economic Models
My latest at IER. Some excerpts:
As the numbers indicate, 59 percent—a solid majority—[of the 365 peer-reviewed climate economists] thought that climate change would be beneficial for the global economy at least through the year 2025. Moreover, 37 percent of the experts thought that climate change would be beneficial to the global economy until at least the year 2050. Does this match up with the apocalyptic rhetoric coming from Vox and other quarters?
And:
The irony here is incredible. Americans have been beaten over the head for years about the “settled science” of the peer-reviewed research, and the Obama Administration assembled an Interagency Working Group that has spent years calculating and updating estimates of the “social cost of carbon.” We at IER have reported on all of the problems with these models, and cited MIT economistRobert Pindyck’s scathing critique. Now guys like Roberts are coming along and effectively saying, “I don’t care about the peer-reviewed literature that the IPCC uses, or the models chosen by the Obama Working Group. Let’s make policy by conducting a survey to see what the group thinks.”
But,
The social cost of human extinction, should it occur, approaches infinity.
The probability of AGW causing human extinction may be small but it can be assumed to be non-zero based on peer reviewed climate models.
So Essentially infinite times non zero equals a positive social cost of carbon number. Lacking a precise model to quantify that number we resort to the democratic method i.e. “Let’s make policy by conducting a survey to see what the group thinks”
It is a rough approximation to be sure but, how could anyone opt for total inaction instead when there is a non zero probability of human extinction that is in our power to avoid? To do so would be to hide behind the excuse that we don’t have 100% certainty in our climate and economic models, 100% certainty is an unrealistic standard that is never applied to models used in policy decisions.
I wish this were entirely sarcasm but, it is essentially the conversation I have had with an very thoughtful and intelligent PhD social scientist.
“As the numbers indicate, 59 percent—a solid majority—thought that climate change would be beneficial for the global economy at least through the year 2025.”
The question asked was whern would the effect be negative. I don’t think “no net negative effect” is the same as “beneficial”. It is possible that the responents thought the positive and negative were balanced.
I have asked before, but no answer has come – what interest rate do you think is approporiate for inter-generational effects?
Lower or reducing discount rates are based on sound reasoning. I think “arbitrary” is a bit misleading. The problem is, you cannot avoid using “ethical parameters”, because choosing market rates rather than a different rate is based on ethical considerations.
From what I remember, one of the problems is that the time preference aspect of discounting inter-generational effects is somewhat meaningless. Yet market rates include a time-preference component. If we choose to ignore this and use market rates anyway, we are making an ethically based choice.
I’ve seen your posts but do not remember you offering specific numbers.
Discounting inter-generational effects (I believe) is meaningless, mostly because beyond a few years (as few as 5) it truly is guessing. Besides producing questionable numbers, what technological changes are going to happen in that time?
“Discounting inter-generational effects (I believe) is meaningless”
Yet we must do it. Whatever we think, we are discounting at some rate – even if it is zero (future same as today) or infinity (no concern for future at all).
I do not know what the number should be. I am pretty sure it should be lower than short term discount rates. That is why I think the failure of the Whitehouse report on social cost of carbon to cite the 7.5% discount rate is not important to this particular debate.
Since you mentioned ethics, what do you think about this argument: It’s wrong to make me stop dumping my garbage on Bill Gates’ lawn because he is so much wealthier than me and can better afford the cost of clean-up.
The New Deal revisited…put the technocrats in charge because they are the smart ones who know how to make things work, democracy and free markets be damned. (Besides, we don’t really need working models if we have the :right: smart people running things.)