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Thursday 24 Aug 2017 | 13:50 | SYDNEY
Thursday 24 Aug 2017 | 13:50 | SYDNEY

Climate change modelling

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14 August 2008 11:47

Yesterday I invited commentary on a Cato Institute article advocating a 'do very little' approach to climate change. I'm grateful to Peregrine for taking up that invitation, but I confess I'm only a little wiser after reading Peregrine's posting.

Peregrine first argues that differences among economists as to how serious climate change is depends on the discount rate they apply. But Peregrine does not go on to offer grounds for prefering one discount rate over another, so it's not clear why the 'do very little' school is wrong. Peregrine then argues that the 'do very little' analysis assumes high costs from carbon trading and moving to low carbon power generation, but discounts the 'surge' in renewables we'd get. If true, that seems a pretty serious omission.

The third argument is an odd one. Peregrine says that when uncertain projections about the future speed and magnitude of climate change are fed into economic theories of discount and growth, they produce 'statistical lies' that support a no-action policy agenda. Does Peregrine mean that all attempts to analyse climate change in these terms are bogus? And if so, what's the alternative?

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