The Costs Of A Warming Planet, Ctd.

A reader writes:

You asked in your post "The Costs of a Warming Planet" for a forceful mathematical counter to Manzi's argument.  But the sort of mathematical argument that Manzi is making is heavily skewed toward doing nothing, and to respond in similar terms of mathematical economics is to reject out of hand the key arguments in favor of doing something about climate change.

The first issue to note in this context is that the sort of long-term economic projections that Manzi is using are, basically, bunk.  Rather than make this case at length here, I'll link (at the risk of shameless self-promotion) to this paper of mine.

The second issue to note is that cost estimates for environmental legislation are always too high.  The Clean Air Act was going to be cripplingly expensive.  Ditto the Montreal Protocol.  Etc.  Cost estimates do not factor in technological innovation, preference adaptation, or even market efficiencies.  And the idea that people will feel noticeably poorer in 2050 because they have one percent less purchasing power compared with a hypothetical counter factual is so overstated as to be almost risible.

The third issue to note is that the two counter-arguments that Manzi dismisses are not ancillary arguments in favor of Waxman-Markley.  They are the core arguments.  Manzi dismisses the international leadership argument because it isn't a sure bet.  No argument there.  But it is a sure bet that without domestic legislation in the U.S., international action will not happen.  And to argue that in some generic bargaining model the U.S. could be seen as playing the sucker misses the real historical pattern in international environmental cooperation in which leadership by the rich world does in fact generate international cooperation.

He also dismisses the insurance argument, the idea that we should take out some policy insurance against a worse-than-expected outcome rather than the median outcome.  This isn't a radical idea - the vast majority of people in this country have insurance of some kind, based on this very logic (the odds of my house burning down are very small, yet I pay lots of insurance against this possibility anyway).  Manzi rejects this thinking for climate change because, unlike the risk of my house burning down, the risks of climate change aren't quantifiable.  Of course they aren't quantifiable - we only have one planet.  Does this make the logic for insurance less compelling, as Manzi claims, or more?  Insisting on quantifiability in this case is simply a way of arguing against any kind of environmental constraint until it's too late.  It's cloaking denialism in a sheen of science, rather than trying to actually address the ethics of the underlying issue.

I've read through the linked paper and find it a helpful counter-argument to Manzi. Here's the closing paragraph:

In deciding among different policy goals or among different levels of normative commitment to environmental issues, we need to begin with ecocentric analysis rather than environmental economics. Because we do not have a reliably fungible measure of utility for long-term projections of environmental costs and benefits, the tools of environmental economics simply do not work effectively for such projections. We do not have the tools to effectively compare economic and environmental utility in the generational future, and therefore must address questions of environmental utility as distinct from those of economic utility. In other words, we need to begin by asking what the natural environment should be like in the future, as a separate question from that of what we want the economy to be like in the future. In short, the environmental economics approach is useful, but it is not a self-contained analytic tool. It is insuficient as a source of long-term environmental policy unless it is augmented by an ecocentric philosophy, a concept of what we want our natural environment to look like.