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Climate Policy Should Pay More Attention to Climate Economics

14 points by Bostonian 5y ago

epistasis 5y ago
Climate economics is terrible, climate policy should ignore nearly all of it. The leaders of climate economics have been so deeply wrong in their analyses, and are usually motivated far more by political ideology than trying to understand the mechanics of the economy. The field is built on treating the aerodynamics of finely tuned fighter jets with the math of spherical cows. We need better industrial policy, investment in proven technology, and investment in new technology, but economists have little to say about this transition that is useful.
- PaulHoule 5y ago
  Specifically if there was an "Eichmann" for climate change it would be https://en.wikipedia.org/wiki/William_Nordhaus https://en.wikipedia.org/wiki/William_Nordhaus whose work delayed a response to the climate crisis for at least twenty years.
- huitzitziltzin 5y ago
  This is an uninformed comment. If you want “better industrial policy” it would help to have some idea of which policies are better than others - that will get you very quickly into cost-benefit analysis which is very much the wheelhouse of economists. If you want “[better? any? new?] investment in proven technology,” you are going to need to make decisions about where scarce dollars should be allocated among different options to achieve your goals at the lowest possible cost. Again: cost-benefit analysis and very much in the domain of economics and economists. If all you care about is achieving a less than 2C increase in average temperature, you have an “easy” solution - shut everything down now. Once you accept that you aren’t ever going to do that, you need to make hard decisions about how to allocate resources among competing options to achieve your aim. You would like to achieve your goal at a minimum cost while taking into account uncertainty over the range of possible outcomes and the different effectiveness of different choices. That’s literally economics 101. You don’t have to like what we say but you should definitely listen before deciding to ignore it.
  - jjk166 5y ago
    Having economists do the cost-benefit analysis of technology development is like having a physicist who studies vibrations as a concert pianist. Having a really good understanding of the theory behind cost-benefit analysis does not in any ways inform you about the actual costs or benefits of a specific decision. Literally every decision ever involves the allocation of finite resources, that does not mean that economists are qualified to triage patients at hospitals, optimize the design of bridges, or negotiate plea deals for criminal defendants. The climate is another example of an incredibly complicated system where decision makers must have detailed understanding of the actual costs and benefits they are evaluating.
  - epistasis 5y ago
    There's a big difference between paying attention to costs and optimizing the transition, and listening to climate economists. The best grid modelers out there for planning a carbon free electricity grid are not economists. They may be applying economics 101 as you call it, but they were not primarily trained in the field and they do not identify as economists. Similarly, when it comes to how to change behavior. There may be some hints from behavioral economy in order to guide consumer behavior, but they will be minor effects compared to industrial policy, tax policy, and solid investment in new tech and deployment. The National Review is a political magazine with a huge slant, and that slant is not towards a speedy and effective decarbonization of the economy. Quite the opposite. They are trying to convince their audience to listen to climate economists in order to slow the transition.
thehappypm 5y ago
In a related note, I think climate change is such a huge benefit to politicians. They no longer need to prepare for environmental disasters! Everything can be blamed on climate change. A flood happens and you cut the budget so the levees broke? Not my fault -- climate change! Piss-poor forest management leads to wildfires? Not my fault -- climate change! It's the easiest escape hatch ever.
- tonyedgecombe 5y ago
  I suppose it will make a change from blaming everything on covid.
jonahbenton 5y ago
Standard National Review debate team piece that aims to be clever about picking a strawperson and then with a decapitating flick of the rapier dropping the strawperson to the ground. Congratulations for nothing. Yes, climate economics matters. But no, we don't have an accounting model that incorporates the "free" stuff on which all complex life depends. No, the IPCC GDP impact estimates are not worth the digital paper they waste. And no, GDP is not a reasonable measure to approximate quality of life. Try next time to contribute to the conversation.
imtringued 5y ago
Is the data in the article trustworthy? Isn't 5% loss of GDP something like an absolute best case after doing everything we can to reduce CO2 emissions? No matter how benign climate change is, there is no way it will get better by increasing emissions.

14 points by Bostonian 5y ago

Climate economics is terrible, climate policy should ignore nearly all of it. The leaders of climate economics have been so deeply wrong in their analyses, and are usually motivated far more by political ideology than trying to understand the mechanics of the economy. The field is built on treating the aerodynamics of finely tuned fighter jets with the math of spherical cows. We need better industrial policy, investment in proven technology, and investment in new technology, but economists have little to say about this transition that is useful.

PaulHoule 5y ago
Specifically if there was an "Eichmann" for climate change it would be https://en.wikipedia.org/wiki/William_Nordhaus https://en.wikipedia.org/wiki/William_Nordhaus whose work delayed a response to the climate crisis for at least twenty years.
huitzitziltzin 5y ago
This is an uninformed comment. If you want “better industrial policy” it would help to have some idea of which policies are better than others - that will get you very quickly into cost-benefit analysis which is very much the wheelhouse of economists. If you want “[better? any? new?] investment in proven technology,” you are going to need to make decisions about where scarce dollars should be allocated among different options to achieve your goals at the lowest possible cost. Again: cost-benefit analysis and very much in the domain of economics and economists. If all you care about is achieving a less than 2C increase in average temperature, you have an “easy” solution - shut everything down now. Once you accept that you aren’t ever going to do that, you need to make hard decisions about how to allocate resources among competing options to achieve your aim. You would like to achieve your goal at a minimum cost while taking into account uncertainty over the range of possible outcomes and the different effectiveness of different choices. That’s literally economics 101. You don’t have to like what we say but you should definitely listen before deciding to ignore it.
- jjk166 5y ago
  Having economists do the cost-benefit analysis of technology development is like having a physicist who studies vibrations as a concert pianist. Having a really good understanding of the theory behind cost-benefit analysis does not in any ways inform you about the actual costs or benefits of a specific decision. Literally every decision ever involves the allocation of finite resources, that does not mean that economists are qualified to triage patients at hospitals, optimize the design of bridges, or negotiate plea deals for criminal defendants. The climate is another example of an incredibly complicated system where decision makers must have detailed understanding of the actual costs and benefits they are evaluating.
- epistasis 5y ago
  There's a big difference between paying attention to costs and optimizing the transition, and listening to climate economists. The best grid modelers out there for planning a carbon free electricity grid are not economists. They may be applying economics 101 as you call it, but they were not primarily trained in the field and they do not identify as economists. Similarly, when it comes to how to change behavior. There may be some hints from behavioral economy in order to guide consumer behavior, but they will be minor effects compared to industrial policy, tax policy, and solid investment in new tech and deployment. The National Review is a political magazine with a huge slant, and that slant is not towards a speedy and effective decarbonization of the economy. Quite the opposite. They are trying to convince their audience to listen to climate economists in order to slow the transition.

thehappypm 5y ago

In a related note, I think climate change is such a huge benefit to politicians. They no longer need to prepare for environmental disasters! Everything can be blamed on climate change. A flood happens and you cut the budget so the levees broke? Not my fault -- climate change! Piss-poor forest management leads to wildfires? Not my fault -- climate change! It's the easiest escape hatch ever.

tonyedgecombe 5y ago
I suppose it will make a change from blaming everything on covid.

jonahbenton 5y ago

Standard National Review debate team piece that aims to be clever about picking a strawperson and then with a decapitating flick of the rapier dropping the strawperson to the ground. Congratulations for nothing. Yes, climate economics matters. But no, we don't have an accounting model that incorporates the "free" stuff on which all complex life depends. No, the IPCC GDP impact estimates are not worth the digital paper they waste. And no, GDP is not a reasonable measure to approximate quality of life. Try next time to contribute to the conversation.

imtringued 5y ago

Is the data in the article trustworthy? Isn't 5% loss of GDP something like an absolute best case after doing everything we can to reduce CO2 emissions? No matter how benign climate change is, there is no way it will get better by increasing emissions.