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A Battle Over the Costs of Global Warming
Course: ECP 3302, Fall 2011School: Florida State College
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Word Count: 1277
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IN ABattleOvertheCostsofGlobalWarming SIGN TO E-MAIL OR SAVE THIS PRINT REPRINTS SHARE By DAVID LEONHARDT Published: February 21, 2007 NewHaven Video of the Debate The Stern Review A Summary of the Review William Nordhaus's Response Martin Weitzman's Response Roster of Debate Participants Related ReaderResponses(February21,2007)...
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IN ABattleOvertheCostsofGlobalWarming
SIGN TO E-MAIL OR SAVE THIS
PRINT
REPRINTS
SHARE
By DAVID LEONHARDT
Published: February 21, 2007
NewHaven
Video of the Debate
The Stern Review
A Summary of the Review
William Nordhaus's Response
Martin Weitzman's Response
Roster of Debate Participants
Related
ReaderResponses(February21,2007)
Thereisanunofficialcodeofconductthatdictateshowintellectualsshould
behavewhentheyrejoustingwitheachother,asortofGenevaConvention
fortheivorytower.
Beforetheyattacksomebodyelseswork,theyfirstneedtopraisetheir
opponent.Atypicalwaytodosoistodescribeanotherprofessorasa
distinguishedscholarwhohasmadeanimportantcontributiontothe
researchliterature.Whenyouhearthat,youcanbeprettysurethingsare
abouttogetnasty.
Therestofuscanusuallyignorethesespats,butonceinawhilethereisan
academicfightthatreallymatters.Theeconomicsprofessionisengagedin
oneofthoserightnowand,asluckwouldhaveit,itsevenmore
entertainingthanmost.
Lastweek,SirNicholasStern,atopadvisertotheBritishgovernment,came
totheUnitedStatestotalkaboutclimatechange.InOctober,acommission
heledreleaseda700pagereportcallingforurgentactionagainstglobal
warmingtopreventeconomicdamagethatcouldrivalthatoftheworld
warsandtheGreatDepression.Givenitssourceanditstone,theStern
Reviewhasnudgedpeopletotalkmoreseriouslyaboutclimatechange.
InthemindsofalotofAmericaneconomists,however,thereviewisabadly
flawedpieceofwork.Theseeconomistsdontdoubtthatearthisgetting
hotter,thathumanactivityisthecauseandthattheresultscouldbebad.
ButtheythinkthatSirNicholasmayhaveexaggeratedthelikelyspeedof
warming,amongotherthings,andoverstatedthecaseforbig,quickaction.
TheepicenteroftheoppositionhasbeenhereatYale,andsolastweek,
afterstoppinginWashingtontotestifybeforeCongress,SirNicholascame
toNewHavenforapublicdebatewithhiscritics.Withacoupleofhundred
studentsandprofessorsintheaudienceandasculptureofanangryZeus
likefigureloomingabovethestagethetwosideswentatitinthe
dignified,viciouswaythatacademicsdo.
SirNicholasspokeduringthemorning,andhiscaseisreallyquitesimple.
Thecarbondioxidethathasalreadybeenpumpedintotheatmosphere
guaranteesthattheplanetwillkeepgettingwarmer.Butthedecisionsthat
peoplemakeoverthenextcoupleofdecadeswilldeterminehowmuch
warmerand,inalllikelihood,howmanyfloods,droughts,hurricanes,
cropfailuresandspeciesextinctionsoccur.Thesurestwaytoreduce
emissionsisabigeconomicdeterrent,likeacarbontax.
Thelaterweleaveit,themoredifficultitwillbe,hesaid,andthemore
risksyourun.
TheSternReviewsmostinfluentialcritichasprobablybeenWilliam
Nordhaus,a65yearoldYaleprofessorwhoisasmainstreamaseconomists
come.JeffreyD.Sachs,theantipovertyadvocate,callsMr.Nordhaus
aboutthemostreasonablemanIknow.
Hewasthefirstspeakerafterlunch,and,ofcourse,hehadsomeverynice
thingstosayaboutSirNicholas.Thereportwaspresentedherevery
eloquentlybyadistinguishedscholar,Mr.Nordhaussaid.Butthencame
thejuicystuff:theSternReviewcommitscruelandunusualpunishmenton
theEnglishlanguage,Mr.Nordhaussaid,andtheBritishgovernments
opiniononclimatechangeisnomoreinfalliblethanwasitsprewarview
aboutweaponsofmassdestructioninIraq.
ThiswasfairlytamecomparedwiththecommentsofanotherYale
economist,RobertO.Mendelsohn.Iwasawestruck,hesaid,comparing
SirNicholastoTheWizardofOz.ButmyjobistobeToto,headded,in
Review.Mr.Nordhauswonderedifcarbonemissionsandtemperatures
wouldriseasquicklyasthereportsuggests,andMr.Mendelsohnpredicted
thatpeoplewouldlearntoadapttoclimatechange,reducingitsultimate
cost.
Butthei
thesamegoodhumoredtoneMr.Nordhausused.IsitinfactTheWizard
ofOz,orisitnothingatall?
ThetwoprofessorsraisedsomequestionsaboutthescienceintheSternrmainobjectionrevolvedaroundsomethingcalledthediscount
rate.TheSternReviewassumedthatadollarofeconomicdamage
preventedacenturyfromnow(adjustedforinflation)isroughlyasvaluable
asadollarspentreducingemissionstoday.Ineffect,thereportarguesfor
spendingthemoneytocutemissionsbecausefuturegenerationshaveas
muchclaimonresourcesascurrentgenerations.Ivestillnothearda
decentethicalargumentforbelievingotherwise,SirNicholassaidatthe
debate.
Imguessingthatyourinstinctistoagreewithhim.Minecertainlywas.The
problemisthatnoneofusactuallybehavethisway.Ifwereallythought
thatourgreatgrandchilddeservedourmoneyasmuchaswedo,wewould
nevergoouttodinneragain.Instead,wewouldinvestthe$50wewould
havespentondinner,confidentthatitwouldgrowovertimeandbecome
perhaps$1,000forourgreatgrandchildtoputtowardhealthcare,
educationorasupercomputer.Anyofthatispreferabletoourmeasly
dinner.
Butadollartodaytrulyismorevaluablethanadollaracenturyfromnow.
Foronething,yourgreatgrandchildwillalmostcertainlybericherthanyou
areandwontneedyourmoneyasmuchasyoudo.Sospendingadollaron
carbonreductiontodaytoavoidadollarsworthofeconomicdamagein
2107doesntmakesense.Wewouldbebetteroffputtingthemoneytoward
somethinglikelytohaveahigherreturnthanalternativeenergy,like
education.
Technically,then,SirNicholassopponentswinthedebate.Butinpractical
terms,theirargumenthasaweaklink.Theyareassumingthattheeconomic
gainsfrom,say,educationwillmakefuturegenerationsrichenoughto
makeupforanydamagecausedbyclimatechange.Seawallswillbeableto
protectcities;technologycanallowcropstogrowinnewways;better
medicinescanstopthespreadofdisease.
Nooneknowswhetherthisistrue,letalonedesirable,becausenoone
knowswhatlifewillbelikeonaplanetthatisfivedegreeshotter.Ifever
therewasanexamplewheretherewasuncertainty,thisisit,saidMartinL.
Weitzman,aHarvardeconomistwhoattendedthedebate.
Whilesittingthere,IwasremindedofthespeechesthatAlanGreenspan
gaveafewyearsagoabouttherisksofdeflation.Itwasntthemostlikely
outcome,hesaid,buttheconsequencesofitcouldbesobadthatpolicy
makershadtotakestepstopreventit.Focusingattentiononthispoint
thecatastrophicrisksofclimatechangeisSirNicholassbiggest
accomplishment,whateveryouthinkofhismath.
AsMr.Weitzmanputsit,theSternReviewisrightforthewrongreasons.
Evenitscriticsseemopentothisidea.WhenMr.NordhausandSirNicholas
wereexchangingemailmessagesbeforethedebatetotheircredit,some
academicskeeptheirargumentsfrombecomingpersonalMr.Nordhaus
sentanotethatsummeduphisview.Ithinkitsagreatstudy,butits50
yearsaheadofitstime,herecalledwriting.Sinceeverybodyelseis50
yearsbehindthetimes,ifyouaveragethetwo,youmightcomeoutjust
right.
Inotherwords,itstimeforataxoncarbonemissions.
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Florida State College - ECP - 3302
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Florida State College - ECP - 3302
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