The last JEP has an interesting survey article by Richard Tol on the economic effects of climate change. In his own words (italics are mine):Only 14 estimates of the total damage cost of climate change have been published, a research effort that is in sharp contrast to the urgency of the public debate and the proposed expenditure on greenhouse gas emission reduction. These estimates show that climate change initially improves economic welfare. However, these benefits are sunk. Impacts would be predominantly negative later in the century. Global average impacts would be comparable to the welfare loss of a few percent of income, but substantially higher in poor countries. Still, the impact of climate change over a century is comparable to economic growth over a few years.
There are over 200 estimates of the marginal damage cost of carbon dioxide emissions. The uncertainty about the social cost of carbon is large and right-skewed. For a standard discount rate, the expected value is $50/tC, which is much lower than the price of carbon in the European Union but much higher than the price of carbon elsewhere. Current estimates of the damage costs of climate change are incomplete, with positive and negative biases. Most important among the missing impacts are the indirect effects of climate change on economic development; large-scale biodiversity loss; low-probability, high-impact scenarios; the impact of climate change on violent conflict; and the impacts of climate change beyond 2100. From a welfare perspective, the impact of climate change is problematic because population is endogenous, and because policy analyses should separate impatience, risk aversion, and inequity aversion between and within countries.
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"the debate" -- you'd have to be a bit more specific than that, as there are many debates on climate
your statement is roughly true for much of the debate in Europe on climate policy
Richard, thanks for stopping by to comment. I refer to the economic policy aspects of the debate. I agree that, if you search in the right places, you'll find islands of rationality. However, it also appears to me that, even here in the US, most public and political views on the subject are marked by a disturbing lack of concern for sound economics. I hope that articles like yours will help to improve the quality of the debate.
But is the cost of protecting forest for the indiginous peoples a cost of human rights or a cost of reducing the climate change impact? Is going to war to maintain world exploitation of oil rich nations from insurgencies angry over the exploitation a national security cost or a climate change cost because of the high level of carbon emissions?
Is replacing labor saving oil which causes millions of idle workers with labor intensive energy producing capital creation a cost of fighting limate change or an economic benefit from reduced government welfare and increased tax revenues?
In the real world, unlike the economic ivory tower, everything is connected. Oil is limited by nature and no economic handwaving can eliminate peak oil, consumption of which is directly tied to green house gases.
Imagine a magic bullet that captures greenhouse gases cheaply; peak oil is going to impose essentially the same limits on oil consumption that reducing the impact of climate change imposes.
And why not simply add up the costs the world society has already racked up as a result of the policies that cause so much environmental harm? What is a mountain flattened and a stream polluted costing?
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