Most economists agree on the economics of climate change mitigation
If you read only one article this week — nay, this month — make it this one from the increasingly indispensable Eric Pooley: "Surprise — Economists Agree! A consensus is emerging about the costs of containing climate change. So why is no one writing that?"
The point is that despite what you read in the media, there is in fact a fairly broad consensus among economists about the costs of climate change mitigation. Namely:
- The costs of inaction are far higher than the costs of action, and
- the costs of action are fairly modest — between 0.5 and 1 percent of GDP by 2030, a far, far smaller impact than the current economic crisis is having.
This is why, in the words of economist Robert Stavins, "There is general consensus among economists and policy analysts that a market-based policy instrument targeting CO2 emissions … should be a central element of any domestic climate policy."
Why is the media so bad at conveying this consensus? That’s what Pooley investigated in more detail in his discussion paper [PDF], which Joe Romm covered here and which is also an absolute must-read. The reasons are basically twofold:
- The media is terrible at distinguishing between reputable economists and hacks, and
- economists argue vigorously among themselves even when they agree on the big picture, and this can obscure the larger consensus from the view of journalists.
I would add the extraordinary efficacy of industry-funded right wing think tanks and media outlets at placing their hacks as authoritative sources. They are incredibly good at it, and not just in this area. Journalists aren’t just poor judges; the hacks are actively thrust upon them.
Now, as it happens, I agree with Romm that the scientific consensus, as represented by the latest IPCC report, probably understates the case — that climate change is more severe and urgent than the report indicates (and most journos don’t even do a good job of accurately representing that degree of urgency).
I also agree with a growing number of economists — people doing bottom-up studies that try to take efficiency and innovation seriously, like the folks at ACEEE — that the economic consensus probably overstates the cost of addressing climate change. I would bet a substantial sum of money that by 2030 we will look back at efforts to eliminate GHG emissions (should we ever make them in earnest) as an enormous economic boon to the country, every bit as fateful as the move from whale oil to electricity. It will unlock a new era of economic growth and prosperity.
But I realize that both these views are outliers. I realize journalists are obliged to accurately represent the middle of the bell curve of opinion.
Problem is, they’re not doing that on the economics. Not even close. They’re getting it just as badly wrong as they got the science for years and years.
So all you journos, please inscribe this sentence into your memory:
Most economists agree that the costs of addressing climate change will be modest and that the costs of failing to do so will be enormous.