Archive for February, 2009

Paul Collier, an economist, has an article in Guardian UK today that makes a case for climate change. It’s not what you might think. The headline says enough to draw my attention:

I don’t buy economists’ case for fighting climate change- the orthodox rationale fails to chime with most people’s ethical motivation for action to save the environment

He starts off with a nasty slider.

The 2006 Stern report brought the legitimising power of orthodox economics to the emotive battleground of global warming. In his Review on the Economics of Climate Change – widely regarded as the most important and comprehensive analysis of global warming to date – Lord Stern argued that in cold cost-benefit terms, it made sense for the present generation to make sacrifices because the benefits to future generations would be so substantial.

That’s two uses of the word orthodox, and we’re just getting started. Collier’s main beef, though he does not state it in techincal terms, is rooted in the discount rate, the percentage at which we devalue the future. There has been a lot of debate about the discount rate.

Personally, I doubt whether the utilitarian calculus is the right ethical framework in which to think about global warming. It gives us numerical answers, but it just does not feel as though the calculus captures my concerns. Take the valuation of the future: are we radically undervaluing the interests of future people?

The problem is that, in cost-benefit analysis, economists tend to put a floor on the discount rate, even though conceivably we could put it at zero. Thus, Collier seems to call for a different framework to view the problem, an ethical one (god forbid).

Ultimately, in a democracy our policy decision rules must rest on ethical principles that are widely shared by citizens. I suspect that most people feel that they should reduce carbon emissions, but the key issue is why? Is their motivation better captured by the utilitarian calculus used by economists, or by a sense of custodial obligation towards our natural legacy, of which carbon is but one instance?

I agree whole-heartedly.

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Some links

Game Theory got one right!

Maybe the free market doesn’t provide the best incentives…

Greenspan learns that individual integrity cannot be a subsitute for government regulation

Fred Block wants socialized investment.

Humanities need to put up or shut up- sound familiar?

Environmental Economics vs. Environmentalism …and… a reasoned mediation

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Cartoon Roundup


Governor's Soup


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A Little Game…

Try replacing “scientists” with “economists.”


“Some scientists want to influence policy in a certain direction and still be able to claim to be above politics,” Dr. Pielke says. “So they engage in what I call ‘stealth issue advocacy’ by smuggling political arguments into putative scientific ones.”

From this article about Obama’s new science team.

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French conservatism

France is overhauling its ag policies big time.

Paris announced that from next year it would confiscate over 20 per cent of the billions of euros of European taxpayers’ money paid to its ranch-like cereals farms and divert the cash to hill farmers, grazing land, shepherds and organic agriculture.

The announcement brings to an end almost half-a-century of official hypocrisy in which French governments have talked about protecting “family farms” and “quality food” but allowed the bulk of European largesse to flow to chemical-assisted, hedge-free, cereals-ranching in northern, central and eastern France.

Obviously the free market types will decry any subsidies, but I think there is a good argument that the same policy should be executed in the US. I think it goes something like, small farms have a positive externality, so we should subsidize them. Anyways, time for Tom Vilsack to step up. Yesterday’s news was a good sign.

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Financial Crisis Fashion

Art Auction Turnabout

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Available Online For Free


From Wooster

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