I am embarrassed to admit that I did not bestir myself to read Paul Krugman's 8000-word New York Times Magazine piece from last Sunday, "Building a Green Economy," until I read Worldchanging's Alex Steffen's post this morning arguing that framing the case for action against greenhouse gas emissions "as a cost-benefit discussion" while ignoring the dire consequences of climate change "is to abet delay, compromise and corruption."
I thought, hmmm, that doesn't sound like the Paul Krugman I am familiar with. So I read the piece, and I'm glad I did, because now I have something handy to recommend to anyone who wants a cogent, forceful introduction to the economics of climate change.
But as for the charge that Krugman understates the potential consequences of doing nothing? I'm not sure that will wash. After all, the second sentence of the piece is: "If we continue with business as usual, they say, we are facing a rise in global temperatures that will be little short of apocalyptic."
Let's be clear. We're not talking about a few more hot days in the summer and a bit less snow in the winter; we're talking about massively disruptive events, like the transformation of the Southwestern United States into a permanent dust bowl over the next few decades...
Keeping world markets open is important, but avoiding planetary catastrophe is a lot more important....
Current projections of global warming in the absence of action are just too close to the kinds of numbers associated with doomsday scenarios. It would be irresponsible -- it's tempting to say criminally irresponsible -- not to step back from what could all too easily turn out to be the edge of a cliff.
Compared to the rhetoric you might hear from most economists or legislators, I think "apocalyptic, massively disruptive, catastrophe, and doomsday" are sufficiently alarmist, and do not constitute evidence of falling into "the trap of downplaying the potential consequences in order to appear more reasonable in an American debate that's been distorted out of any relationship to reality."
But then there's Steffen's perspective.
Many of the negative effects of climate change are expected to be catastrophic cascading failures -- a phenomenon baseline economic models seem unable to incorporate. Large, permanent collapses are entirely within the scope of reasonable expectation and yet are not generally accounted for in economic studies. For instance, there's increasing worry about mega-fires which could burn off whole climate-stressed forests, burning so hot they change the very composition of the soil, resulting in permanently degraded land (at least within human time scales): that sort of collapse is not factored into our models of economic reality, yet is increasingly expected even if we act on climate change. The economic impacts of these sorts of catastrophic cascading failures are massive in terms that dwarf today's economy; the economic impacts of the melting of the Arctic ice cap alone were just estimated to be as great as $24 trillion dollars by 2050. That doesn't count the spread of epidemic diseases, more rapidly rising seas from the increased melting of Antarctica, desertification, the burning of the rainforests, the spread of invasive species, or a host of other massive problems. (And remember, these are expected effects, not the worst case scenarios.) The entire world economy -- the value of everything humanity did anywhere on the planet -- was $57 trillion last year, to give a sense of scale... [O]ur best understanding of what we expect is coming given even moderately strong action is a massive disruption to life as we know it; while the nine degree temperature rise scenarios are truly Mad Max worlds of massive death and disaster, that's the road we're still on. There will be no economy to speak of in that world.
Maybe economists are just constitutionally incapable of imagining a future without an economy?