Mainstream Economists versus the Earth

[From “Notes from the Editors,” Monthly Review, July-August 2009. Posted by permission.]

A new book by economist Frank Ackerman, Can We Afford the Future?: The Economics of a Warming World (Zed, 2009), presents an important and startling thesis:

“As the climate science debate is reaching closure, the climate economics debate is heating up. The controversial issue now is the fear that overly ambitious climate initiatives could hurt the economy”(6).

With climate-change skeptics losing influence, mainstream economists—always the ultimate ideological defenders of the capitalist system—are stepping into the breach to ensure inaction on global warming. Armed with cost-benefit analyses, they report that saving the planet for its inhabitants may be all very well and good … but it is simply too expensive for the capitalist economy to afford.

A prime example is William Nordhaus at Yale, the doyen of climate economics in the United States, who argues for an “optimal” climate policy ramp that could eventually lead, according to Nordhaus himself, to levels of carbon concentration in the atmosphere of 700 ppm CO2. This is a level that most climate scientists would characterize as absolutely catastrophic, since it is associated with a jump in average global temperatures approaching 6°C (10.8°F). Nordhaus builds into his conservative cost-benefit model such notions as a subjective preference for warmer weather in Northern countries, automatic technological progress, and a high discount rate that drastically reduces the present value of future lives. On economic grounds, he recommends reductions in global greenhouse gas emissions by a mere 25 percent by mid-century—less than a third of what most climate scientists see as necessary. Nordhaus seems oblivious of the magnitude of the planetary ecological disaster that such weak efforts to reduce emissions would generate (see Richard York, Brett Clark, and John Bellamy Foster, “Capitalism in Wonderland,” Monthly Review, May 2009).

Nordhaus’s chief rival within mainstream climate economics is Nicholas Stern. Stern was the author of the British government’s 2007 Stern Review, often characterized as a “radical” approach to climate economics. In his new book, The Global Deal (2009), Stern has retreated from the 550 ppm CO2e (carbon dioxide equivalent) target he advocated in The Stern Review. Instead, he argues for stabilizing greenhouse gas concentration in the atmosphere at 500 ppm CO2e—associated with a rise in global average temperature rise of 3°C (5.4°F). Nevertheless, he openly acknowledges that the 500 ppm target could potentially prove cataclysmic. As he states in The Global Deal:

There are a number of scientists, the most prominent being Jim Hansen, who have raised strong and serious arguments to suggest that the target should be no larger than 350 ppm CO2 (or around 400 ppm CO2e) given that would bring concentrations back much closer to those in which humankind evolved. The evolutionary processes and the ways in which the physical and human geography have developed give rise to living and settlement patterns for humans and other species which are governed by a particular climate. They point also to the possibility of tipping points such as the collapse of ice sheets, the dying of the Amazon forest, or the release of methane from the permafrost, which could lead to an accelerated process of climate change. (150-51)

In addition to such “serious scientific concerns” raised by climatologists, Stern is clearly aware of human and natural costs of climate change already becoming apparent. Thus, he points to increased flooding in Bangladesh, presumably partly induced by climate change. According to a report in the May 16, 2009, issue of the Lancet, a sea level rise of 0.5 meters would engulf 10 percent of the complex delta region in Bangladesh, which is home to 120 million people.

Indeed, the dire effects of climate change will hit populations in the global South—those with the lowest carbon footprints—the hardest. More than a sixth of the world’s population lives in glacial-fed water catchments. The Bihar flood in India in August 2008, which affected over 4 million people, was partly due to glacial melting. Impending loss of healthy life years due to global environmental change, the Lancet tells us, is predicted to be 500 times higher in poor nations of Africa than among European populations.

Still, despite the growing warnings of scientists and clear signs of impending catastrophe, Stern insists on a climate stabilization target of 500 ppm CO2e. His reason: to push for a lower target that would fully protect the earth and its inhabitants would be to call for more than the capitalist economy with its pursuit of accumulation and profits could possibly deliver. Indeed, a deeper cut in emissions would suggest, “an abandonment or reversal of growth and development” (The Global Deal, 150).

Stern thus opts for an altogether inadequate 50 percent reduction in global greenhouse gas emissions by mid-century (far below what climatologists are recommending), consistent with his 500 ppm CO2e target.

In contrast, Ackerman urges us to adopt a genuinely radical stance to climate economics, based on four slogans:

  • Your grandchildren’s lives are important
  • We need to buy insurance for the planet
  • Climate damages are too valuable to have prices
  • Some costs are better than others.
Posted in Capitalism

One Response to Mainstream Economists versus the Earth

  1. ronzig July 9, 2009 at 10:40 am #

    I wonder when the expert economists will realize that it is better to abandon the failed economic system that Capitalism is than to abandon all life on the planet including Human life to extinction which is the only alternative.