Climate Change: The Ultimate Challenge for Economics William D. Nordhaus delivered his lecture on 8 December 2018 at the Aula Magna, Stockholm University.
"The fact that the single most prominent orthodox economist [Nordhaus] in the world working on climate change considers the risks from 4°C of warming to be "optimal" tells us everything about the bankrupt state of orthodox economics." Climate Crisis and the Global Green New Deal, Chomsky, Pollin, 2020, Verso Books
Great lecture! One challenge with the proposed club: how to deal with historical CO2 emissions? It seems only fair to implement the 'polluter pays' principle. Industrialised nations have had the chance to 'ride freely' since the industrialization. CO2 emitted since 1800's is still active now. Perhaps this is all ethical and political, and as such not part of economics. But without considering the concept of fairness, we won't get far in climate change negotiations. A potential solution for this problem is to have differentiated forms of memberships based on historical emissions... that would require the same negotiations we are getting stuck on now.
Absolutely! And so obvious, from an ethical and political point of view, like you mentioned, and I think also from a purely economic perspective (previous free-riding dictates the economical conditions of today and tomorrow, it was not just done and can be forgotten), that I don't understand why Nordhaus doesn't mention it. I haven't studied all his work, but I have read/watched quite a few of his articles/lectures.
Nice. What I got from it was, the process of fixing the environment and reducing CO2 is actually easier to do than trying to reduce the economic damages climate change policy would incure. Which I agree, to want drastic action agaisnt climate change, regardless of the damages and changes it would inflict on the economy, would probably distabilize the economy so much those climate change measures would fall short, and the working class would feel the blunt of it. The only reason billions of people can exist on this planet because of how we consume the environment. If we ban plastic, how many people in 3rd world countires would lose their way of life living in factories making toys? Worldwide economic changes would happen if America suddenly reduced it's consumerism. Entire industries would probably need to change, thats a lot of jobs. It's important to create a balance, to fix boths sides of the issue. The planets survival, and societal survival. The different models of regulating CO2 emissions show the cost of fixing the environment, and the cost of damages to the economy regulating CO2 would have. He proposed that instead of setting a strict degree limit, the limit should be calculated on averages. Which I do agree with such an adaptable policy. I think the idea of a climate club is cool. Countires in the club would have to reduce CO2 emissions and the cost of that would be their membership fees. Every country who decides not to join the club will get tariffs on them by the countries in the club. The more countries in the club, the higher the tariffs rise on nonparticipants. Which seems a bit aggressive, but is good incentive for countires to join. Though I don't see how poor countires would be able to reduce carbon emissions if its the byproduct of their main industries.
I think u misunderstood at the non-participant tariffs. I think what he meant by the graph is if the tariffs is increased, then the number of country that want to join the club will increase too, not the other way around.
The abstract of Steve Keen’s 2021 paper, The appallingly bad neoclassical economics of climate change: “Forecasts by economists of the economic damage from climate change have been notably sanguine, compared to warnings by scientists about damage to the biosphere. This is because economists made their own predictions of damages, using three spurious methods: assuming that about 90% of GDP will be unaffected by climate change, because it happens indoors; using the relationship between temperature and GDP today as a proxy for the impact of global warming over time; and using surveys that diluted extreme warnings from scientists with optimistic expectations from economists. Nordhaus has misrepresented the scientific literature to justify the using a smooth function to describe the damage to GDP from climate change. Correcting for these errors makes it feasible that the economic damages from climate change are at least an order of magnitude worse than forecast by economists, and may be so great as to threaten the survival of human civilization."
So, assuming i'm reading his graphs right, his optimal policy of keeping the costs to something he thinks the economy can bare has the global increase in temperature levelling off at 4C. He really needs to do a little more research into the expected effects of that kind of temperature rise. How did he get a prize for this rubbish?
At 4C we are guaranteed to see an ice-free Arctic and almost ice-free Antarctica. I have no idea what this man is smoking to consider 4C warming "optimal". It's the definition of "not optimal."
thank you but no thanks, , when the laws of the society no longer reflect reality economics fall to the the wayside, the people can no longer afford this reality it does not matter anymore Even if saving the World was FREE just by voting with your wallet we couldn't do it. WE just dont have ANY money, ...
