John Quiggin thinks academic economists look good on the issue of climate change
John Quiggin:
Anyway, I do think most academic economists believe it makes sense to price carbon emissions either via a tax (see Greg Mankiw's Pigou Club) or a cap and trade system (as advocated by Robert Stavins). Differences between these two approaches are small in economic terms. Political differences may be large but I just don't get the politics here. I do believe arguments against any form of policy are from a considerably smaller group of economists that typically have less standing and tend to be closely tied to some right-wing ideological faction. There is also serious debate about the correct carbon price and whether it is best to start with a high price for carbon or start with low price and gradually ramp up.
I do, however, think economists as a group are generally biased toward the idea that adaptation to climate change will be relatively easy while adaptation to a low-carbon economy will be difficult. I cannot carefully document that impression (well, maybe I could with a lot more work than a quick blog post). While I regard both kinds of adaptation as highly uncertain, my own take on the evidence thus far is that adapting to a low-carbon economy will be less costly than adaptation to a significantly warmer climate.
Ross Gittins repeats the criticism he, Ken Henry and Martin Parkinson, have put forward previously, that economists were either missing in action or actively unhelpful in the climate change debate. I disagree – I think academic economists as a group look a lot better on this issue than do economic columnists, and (on the limited available evidence) at least as good as public servants.
The views of the profession were stated pretty clearly back in 2002, when Clive Hamilton and I organized a statement calling for ratification of Kyoto which got 250 signatures (about 40 per cent of the entire academic economics profession at the time, which is huge given that many people never sign anything, or don’t get round to answering their email). A second pro-Kyoto statement in 2007 got 270 signatures, including 70 professors.
Against that, there are a handful of rightwingers who accept the delusional anti-science line that is required as a totem of tribal loyalty on the right. Not only is this group numerically small but, AFAIK, it doesn’t include anyone with substantial standing in the profession[1]. That’s certainly what the public record suggests. In 2002, John Humphreys and some others announced a counter-statement, but it never appeared, presumably because of the embarrassing quantity and quality of those willing to sign.The footnote [1] presumably refers to this issue.
Anyway, I do think most academic economists believe it makes sense to price carbon emissions either via a tax (see Greg Mankiw's Pigou Club) or a cap and trade system (as advocated by Robert Stavins). Differences between these two approaches are small in economic terms. Political differences may be large but I just don't get the politics here. I do believe arguments against any form of policy are from a considerably smaller group of economists that typically have less standing and tend to be closely tied to some right-wing ideological faction. There is also serious debate about the correct carbon price and whether it is best to start with a high price for carbon or start with low price and gradually ramp up.
I do, however, think economists as a group are generally biased toward the idea that adaptation to climate change will be relatively easy while adaptation to a low-carbon economy will be difficult. I cannot carefully document that impression (well, maybe I could with a lot more work than a quick blog post). While I regard both kinds of adaptation as highly uncertain, my own take on the evidence thus far is that adapting to a low-carbon economy will be less costly than adaptation to a significantly warmer climate.
Economists who believe in the price mechanism shouldn't think that adapting to a carbon price, even a high one, will be hard. Prices change all the time, after all.
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