"Policymakers often demand precise numbers, whether it’s the fiscal multiplier, the elasticity of taxable income, or the social cost of carbon."
Not often enough. :) Neither the CO2 emissions mitigation incentives in the IRA or the One Budget Bashing Bill revision of those incentives were guided by any estimate of the social cost of carbon.
There is a deeper problem than the one you are suggesting about estimating “the” proper social cost of carbon.
Well two different overlapping problems.
The first is that most public policy that seeks to make the economy better - said “social cost of carbon” in fact will almost certainly be net negative.
Just think about it logically, without numbers. If “climate change” is only going to reduce world economic output by 4% - hell, even 8% - in 75 years, then the correct answer economically is to DO NOTHING except developing some adaptation technology.
So the first issue is that there is immense uncertainty about the economic effects of “climate change”, and in all but the most disastrous (more in a moment),the prescribe cures surely are worse than the disease.
The fact that only the so-called tail risk is the case where different public policy could with any meaningful plausibility be economically worthwhile.
I.e. if the policy has a meaningful chance of avoiding xx degrees (2,3, 4 - you pick) of warming, which then accelerates.
Different people propose different estimates of this likelihood (some suggesting it is close to impossible). I claim no expertise whatsoever on this point.
Where I do claim the expertise of logic is that the public policy prescriptions of the left today - the ones they think the public might swallow - have a chance vanishingly close to zero of being the difference of avoiding that tipping point or not.
And so what the left is proposing is a “heads we (humanity) lose [because we waste enormous resources and reduce economic growth for no good reason], and tails humanity almost certainly also loses” - because the policies are almost guaranteed not to be sufficient to make a difference in the “existential risk” case to avoid said existential risk.
So the only winners are the leftists attaining and holding public power by pointing to this shibboleth which even in the very unlikely case that it does happen they will not stop.
Just think about it logically, without numbers. If “climate change” is only going to reduce world economic output by 4% - he’ll, even 8% - in 75 years, then the correct answer economically is to DO NOTHING except developing some adaptation technology.
Non seq. It depends on the cost of "doing something."
In practice, almost all the “doing somethings” involve growth reducing policies like restricting the supply of fossil fuel, or mandating so-called green energy are cures far worse than the disease.
Note I said almost all. But the conceit that interventionist industrial government policy will be net beneficial for growth is utterly unfounded. And that’s even without the now well-known public choice problems.
I think I’d agree to ”rarely.” But I think it’s importat to think about when those rare cases occur and then again if givne real world imperfections of government something X should be done.
Example: Capital punishment is the correct puishment in some cases. I don’t trust governments to act in and only in those cases.
The US government should put some serious money into the effort of modeling how damage varies with different CO2 emissions trajectories. Because, like it or not, decisions ARE being made on the basis of model results. Why not the best results possible?
And for what it's worth, try to get COP to ask IPCC for better models.
"Policymakers often demand precise numbers, whether it’s the fiscal multiplier, the elasticity of taxable income, or the social cost of carbon."
Not often enough. :) Neither the CO2 emissions mitigation incentives in the IRA or the One Budget Bashing Bill revision of those incentives were guided by any estimate of the social cost of carbon.
There is a deeper problem than the one you are suggesting about estimating “the” proper social cost of carbon.
Well two different overlapping problems.
The first is that most public policy that seeks to make the economy better - said “social cost of carbon” in fact will almost certainly be net negative.
Just think about it logically, without numbers. If “climate change” is only going to reduce world economic output by 4% - hell, even 8% - in 75 years, then the correct answer economically is to DO NOTHING except developing some adaptation technology.
So the first issue is that there is immense uncertainty about the economic effects of “climate change”, and in all but the most disastrous (more in a moment),the prescribe cures surely are worse than the disease.
The fact that only the so-called tail risk is the case where different public policy could with any meaningful plausibility be economically worthwhile.
I.e. if the policy has a meaningful chance of avoiding xx degrees (2,3, 4 - you pick) of warming, which then accelerates.
Different people propose different estimates of this likelihood (some suggesting it is close to impossible). I claim no expertise whatsoever on this point.
Where I do claim the expertise of logic is that the public policy prescriptions of the left today - the ones they think the public might swallow - have a chance vanishingly close to zero of being the difference of avoiding that tipping point or not.
And so what the left is proposing is a “heads we (humanity) lose [because we waste enormous resources and reduce economic growth for no good reason], and tails humanity almost certainly also loses” - because the policies are almost guaranteed not to be sufficient to make a difference in the “existential risk” case to avoid said existential risk.
So the only winners are the leftists attaining and holding public power by pointing to this shibboleth which even in the very unlikely case that it does happen they will not stop.
Just think about it logically, without numbers. If “climate change” is only going to reduce world economic output by 4% - he’ll, even 8% - in 75 years, then the correct answer economically is to DO NOTHING except developing some adaptation technology.
Non seq. It depends on the cost of "doing something."
“It depends on the cost of ‘doing something.’”
In theory, yes.
In practice, almost all the “doing somethings” involve growth reducing policies like restricting the supply of fossil fuel, or mandating so-called green energy are cures far worse than the disease.
Note I said almost all. But the conceit that interventionist industrial government policy will be net beneficial for growth is utterly unfounded. And that’s even without the now well-known public choice problems.
And the best way to combat doing the wrong thing I believe, is to advocate for doing the right thing.
We agree there.
Where we disagree is that imo it is rarely the right thing for *government* to force people to do things via their monopoly power on violence.
“Don’t just do something. Stand there!”
I think I’d agree to ”rarely.” But I think it’s importat to think about when those rare cases occur and then again if givne real world imperfections of government something X should be done.
Example: Capital punishment is the correct puishment in some cases. I don’t trust governments to act in and only in those cases.
The US government should put some serious money into the effort of modeling how damage varies with different CO2 emissions trajectories. Because, like it or not, decisions ARE being made on the basis of model results. Why not the best results possible?
And for what it's worth, try to get COP to ask IPCC for better models.