Thursday, March 1, 2012

Nordhaus Says Climate Skeptics are Wrong

Here in the New York Review of Books (NYRB), economist William Nordhaus smacks down climate skeptics who have misrepresented his analyses of climate change to argue that the most reasonable policy response is to do nothing.

Nordhaus has been working on the climate change problem since the mid-1970s, longer than any other economist (excepting Tom Schelling). His views on climate policy are tremendously influential, so it is understandable that climate skeptics would want to draft his work in support of their claims. The problem is that Nordhaus himself has long maintained that his analysis supports limited immediate action to mitigate climate change, with a slow ramp up of efforts over time as necessary to minimize the social/global costs of climate change (thereby maximizing net social/global welfare). However, the climate skeptics, who are quite accustomed to ignoring inconvenient facts, have misrepresented Nordhaus's findings from his own models and data.

A group of skeptics recently published a controversial op-ed in the Wall Street Journal (which I have discussed here) citing Nordhaus's work in support of their argument that climate change is no big deal, and that we could basically ignore it at least for the next half century. Nordhaus objected to their use of his work (here). I've been told about, but have not seen, a response to Nordhaus by the authors of the WSJ op-ed, claiming that, whatever Nordhaus might believe, his economic analysis actually supports their argument. Nordhaus's new rebuttal in the NYRB should put an end to that nonsense.

Aside from the satisfying put down of the climate skeptics, Nordhaus's article is well worth reading for those who are relatively uninformed about climate science and economics. He presents a concise overview in clear, nontechnical language.

In the ongoing (marginal) debates among economists on what to do about climate change, I'm closer to the Marty Weitzman camp (paying more attention to reducing the "bad fat tails" in which potential climate catastrophes lie) than the Nordhaus camp (focusing predominantly on the mean expected damages in deriving policy prescriptions). But I have the utmost respect for Nordhaus and his work, and have often defended his approach at conferences where policy advocates complain that his prescriptions are too conservative.

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