One of the more common memes heard from the self-styled “skeptics” is that we should not “wreck the economy” by attempting to reduce greenhouse gas emissions through programs like cap and trade or a carbon tax, based on “alarmist” predictions. Implicit in this assertion is that there is solid economic justification or at least a consensus among economists that a cap and trade solution should not be pursued.
A consensus among economists does, in fact, exist. Just not the consensus the denialosphere would like people to believe. Earlier this week, J. Scott Holladay, Jonathan Horne, and Jason A Schwartz from NYU’s Institute for Policy Integrity published a survey of economists on climate change entitled “Economists & Climate Change: Consensus and Open Questions.” Their findings support an under-reported piece by Eric Pooley from early this year about the failure of the media to accurately convey the economic position on mitigation.
The survey found consensus on several key questions:
- Climate change poses risks to the U.S. and global economies;
- Several domestic economic sectors, most notably agriculture, will be negatively affected;
- Uncertainty about climate change increases the value of action;
- The United States should adopt market‐based mechanisms for reducing emissions, those mechanisms will create incentives for efficiency and clean energy, and allowances should be auctioned rather than given away; and
- The United States should join a global regime to reduce emissions, with a majority of economists saying the United States should commit to emissions reductions regardless of other countries’ actions.
The survey also found that there is no consensus that the future costs and benefits of climate change policy should be discounted at a constant rate, with an equal number saying that alternative discount methodologies should be used, and a significant percentage stating that alternative moral inquires were the most appropriate way to approach intergenerational questions.
That last bit is striking. There are those who fancy themselves non-denialists who oppose mitigation on economic grounds based upon narrow readings of economists like Nordhaus- Jim Manzi comes to mind. Manzi and others’ argument against action essentially hinges on the discount rates assumed, portraying their analyses’ choices as mainstream. This survey reveals that rather than being mainstream, there is no consensus on Nordhausian let alone constant discount rates, and those favoring non-constant rates discounted the cost of climate change at a substantially lower rate (i.e. more heavily favoring expenditure now rather than passing the costs off to future generations).
The third finding listed above, though, is the one that needs to be driven home to policy makers. Politicians are fond of stating that they need more certainty before they are willing to get on board with mitigation efforts, while economists overwhelmingly conclude the opposite- uncertainty increases, rather than decreases, the value of mitigating now.
So the next time someone accuses you of being an “alarmist” who is willing to destroy the economy over emissions reductions, feel free to direct them to this report. And while you do so, let them know that they’re the real “alarmists”.