The Costs of “Doing Nothing” on Climate Change Sound Pretty Good

by May 24, 2017Liberty & Economy4 comments

Paul Krugman speaks to The Commonwealth Club of California, in San Francisco. May 22, 2012. (Ed Ritger/Commonwealth Club)

The regulatory costs of reaching the IPCC's goal of limiting global warming would be greater than the estimated cost of climate change damages.

On Twitter earlier this month, New York Times columnist Paul Krugman tweeted:

I commented:

After a couple of other supposed facts, he argued:

I replied by pointing out his fallacy (adopting his euphemistic definition of “do nothing”, meaning to allow there to be a free market):

To expand on my point: government bureaucrats making decisions at best arbitrarily do not know better than the free market with its pricing system how to efficiently direct scarce resources toward productive ends as determined by the will of consumers (that is, by all of us).

That was on May 2. I later came across an article by economist Robert P. Murphy (@BobMurphyEcon), which also happened to have been published on May 2. It’s titled “Earth Day Marchers Ignore the Economic Science of Climate Change“.

In it, Bob Murphy observes that

the IPCC’s own estimate of the economic cost of compliance with the policy goal [of limiting warming to 2°C] was greater than the estimate of the climate change damages from “doing nothing.”

He points out that William Nordhaus, who “is literally one of the pioneers in the field of the economics of climate change” and “one of the most respected authorities on the planet” has said that

The scientific rationale for the 2°C target is not really very scientific.

The full article is worth a read. Especially because, relevantly, Paul Krugman makes an appearance (Krugman dismisses this acknowledgment from Nordhaus, and Bob takes him down).

Click here to read it.

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About Jeremy R. Hammond

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  1. AlanInAZ

    You have Nordhaus’ views backwards. He strongly favors more vigorous emission reduction, not less. Following are excerpts from an article discussing a talk by Nordhaus at the Becker Friedman Institute –

    [Nordhaus]“It might be tempting to conclude that nations should wait until the uncertainties are resolved, or at least until the fog has lifted a little. The present study finds the opposite result.

    “When taking uncertainties into account, the strength of policy (as measured by the social cost of carbon or the optimal carbon tax) would increase, not decrease.”

    Nordhaus’ calculation of the social cost of carbon (SCC) – an estimate of damages linked to climate change – has risen 50% since his last round of DICE modelling in 2013.

    • Jeremy R. Hammond

      You have Nordhaus’ views backwards. He strongly favors more vigorous emission reduction, not less.

      I can’t possibly have his views about that backwards since I didn’t say anything about it.

      • AlanInAZ

        You imply that Nordhaus is a skeptic of temperature goals and therefore favors a relaxed approach to emission regulation. This is not true and distorts Nordhaus’ positions. If you want a laissez-faire approach to emission regulations just say so but don’t use Nordhaus as a backup for your position.

      • Jeremy R. Hammond

        No, I did not imply that Nordhaus favors a relaxed approached to emission regulation. I simply relayed his skepticism about the IPCC’s temperature goal.

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