Economics of the environment
Making Sense of Climate Change, Renewable Energy, and Everything Else
Oded Kafka
Issue date: 3/27/07 Section: Society
- Page 1 of 3 next >
"Economists exist to make weathermen look good," my college roommate used to say. Both groups make verifiable predictive statements about complex systems. Lately, the two groups have lent their predictive powers to a common topic - global climate change. Pick up a newspaper or turn on your television news station on any given day, and you will find a story about global warming, renewable energy, carbon credits, reliance on Middle Eastern petroleum, plug-in hybrid vehicles, cellulosic ethanol - all of which are intertwined. Even President Bush's annual State of the Union address mentioned climate change. In fact there is so much information on this subject that it can be overwhelming. I am going to share a secret that should help you cut through the clutter from climatologists, economists and just about anyone else. It all comes down to uncertainty. The debate is about the extent of uncertainty and the best ways to mitigate risk.
Climatologists, (those are the weathermen) are in general agreement that increased levels of greenhouse gases from human activity have raised the rate of change in our climates. The disagreements surrounding the issue focus on the amount of change we humans should feel responsible for. The effects of climate change are also reasonably certain, although experts disagree about the precise impacts to the complex biosphere - the extent of melting ice sheets and the increasing incidence of droughts and floods. The real danger to ecological and economic health is in volatility, and all indications are that normal climate conditions are becoming more volatile.
The economists, making the case for my erstwhile roommate, are less definite about their predictions. Some argue in opposition to voluntary limits on greenhouse gas emissions, which in the absence of similar restrictions on China will make the US less competitive. Others say that voluntary limits will spur investment and innovation to meet the targets, yielding new technology that can eventually be exported.
Climatologists, (those are the weathermen) are in general agreement that increased levels of greenhouse gases from human activity have raised the rate of change in our climates. The disagreements surrounding the issue focus on the amount of change we humans should feel responsible for. The effects of climate change are also reasonably certain, although experts disagree about the precise impacts to the complex biosphere - the extent of melting ice sheets and the increasing incidence of droughts and floods. The real danger to ecological and economic health is in volatility, and all indications are that normal climate conditions are becoming more volatile.
The economists, making the case for my erstwhile roommate, are less definite about their predictions. Some argue in opposition to voluntary limits on greenhouse gas emissions, which in the absence of similar restrictions on China will make the US less competitive. Others say that voluntary limits will spur investment and innovation to meet the targets, yielding new technology that can eventually be exported.
Be the first to comment on this story