Who says economists don’t have a sense of humor? Actually we don’t, but we have a new website intended to make economics serve environmental objectives far better than it has in the past: ClimateChangeEcon.net.
The site provides regulators, legislators, and policy analysts — and anyone else who’s interested — access to a comprehensive clearinghouse of objective information from the work of diverse experts in the U.S. and abroad. One key feature of the website is a series of primers for legislators unfamiliar with economic basics or seeking preparation for meetings with economic witnesses and advisors. Legislators also will be able to swap information and share best practices from their communities with colleagues in other regions in a secure work area.
Whether we like it or not, economics has come to rule many public policy debates. Market prices tend to govern public decisions about non-market phenomena, and that is certainly true of climate change policy. Since there is no direct way to measure environmental “goods” that don’t actually sell in the market, economists use proxy measures. Those proxies are distorted mirrors, shaped by the assumptions behind the economic models.
But we love to rely on models. All those folks who’ve managed our investments used their models, right?
The collapse of a number of investment houses this year provides stark evidence of the folly of relying on current market prices for assessing the costs and benefits of alternative actions. The financial mess is the result of (1) looking only at short-time horizons and (2) inadequately allowing for risk and unexpected events.
But most cost-benefit analyses — the tools used for assessing public policy choices — reflect the same two errors. That’s why equipping decision-makers with better tools for assessing alternative policies that can affect emissions today and long-term consequences for the climate, the planet and long-term quality of life is so important.
Policymakers trying to find the way out of long-term economic crisis need to understand that altering our carbon-intensive way of life can create real economic opportunities. This new resource reflects a long-term commitment to provide legislators and advocates with a dynamic forum for accessing and utilizing the emerging, and often interdisciplinary, research on the intersection of economic and climate change policy.
To help decision-makers, ClimateChangeEcon.net offers a number of tools:
Basic Economic Guidance for those who need some briefing in economics.
Legislators’ Tools, with questions for legislators can ask in order to uncover the assumptions and analytical logic that shape legislative and regulatory proposals.
The Climate Change Library contains links to documents with bibliographic citations, capsule descriptions, and notations on their web accessibility, geographic focus and analytical objectives, all rated on their readability by non-economists. People signing up as site members can add documents and comment on posted materials so the clearinghouse can grow and offer the collective wisdom of its users.
Web Resources are links to useful web sites from across the globe, described by their host organization’s name and type as well as their content, web features and geographic focus.
The Directory of Consultants is intended as a resource for finding advisors to help develop climate change legislation and regulatory policies. Specialists who are site members will be able to offer their services.
When David Brooks and Thomas Friedman agree in their often dueling New York Times columns that the major pump-priming federal investments proposed by the President-elect need to address energy efficiency and alternative energy production capacity, something is changing. Both of them recognize that the true economics of climate change extends way beyond the costs and benefits of specific energy projects or policies. A full economic analysis must address how different initiatives help create future economic opportunities. The U.S. needs to grasp those opportunities in order to compete in an emerging world market in which the economic importance of energy is far greater than it was a few months ago when oil cost over $140 a barrel.
That’s why we need to share and inform and improve economic analysis in energy and climate policy. That’s what ClimateChangeEcon.net is intended to promote.