jump to navigation

discounting climate change May 27, 2008

Posted by ocmpoma in : society , trackback

James Hrynyshyn over at The Island of Doubt has a post up about the dismal science of economically evaluating the impact of global climate change. Good stuff, elaborating why exactly it’s so difficult to make good predictions about how climate change will affect us and therefore make good policy about what specifically we should do.

I don’t like the reference to discounting as a ’sleight-of-hand accounting technique’, though. I don’t entirely agree with the wait-and-see position put forth by Lomborg, and the line of thought that amounts to hoping that it gets cheaper to counter climate change in the future is, at best, a very risky policy. Moreover, anyone who claims that discounting (in the economic sense) says that it’s better to wait because it’ll be cheaper in the future is either ignorant of the economics or being disingenuous. Discounting is a well-established principal of the dismal science, but it basically says that a sum money today is “worth more” than that same sum of money in the future — which does not mean that we should wait because the technology and effort (along with, by implication, everything else) required to counter climate change will be cheaper. So while I agree with the assertion that using discounting to justify inaction in the sphere of climate change policy is completely bogus, it is bogus because it is a misuse of discounting, and not because discounting itself is bogus.

Tags for this article: , , ,

[?]

Comments»

no comments yet - be the first?