inel

Hi John,

Thanks for the reference to Nordhaus. Now I can better understand where you are coming from. It is pretty cheeky, don’t you think, of Mr. Nordhaus to entitle his document thus:

The Stern Review on the Economics of Climate Change

William Nordhaus

November 17, 2006

Nordhaus says the Stern Review argues that fundamental ethics require intergenerational neutrality. He’s right, and I agree with Stern’s stance: I have given up, currently give up, and shall continue to give up a particular lifestyle in the hope that my kids and their future descendants will have the hope of a reasonable life. Every parent makes that kind of decision to a greater or lesser degree. Stern has applied that ethic to the economics of climate change.

This approach has echoes of the warning “EMPTY WORDS JUST ADD CARBON DIOXIDE” ads of Vattenfall (a Swedish energy company) that I have seen in The Economist and on TV:

Vattenfall video on YouTube:

Economic models have to take into account what a country’s population will accept, embrace or tolerate in terms of ethics. British and American societies have different cultural norms, so I suppose it is natural that Britain would have a different ethical basis from America, and this feeds into the economic models used on each side of the Atlantic.

Both Vattenfall and Stern are in tune with their European populations’ priorities, favouring mitigative and adaptive action now.

Nordhaus notes “alternative ethical perspectives are possible” and “alternative perspectives provide vastly different prescriptions about desirable climate change policies”. I agree with him on this point.

Nordhaus began his commentary with these words:

Opposite ends of the globe

It appears that no two global warming policies on earth are farther apart than the White House and 10 Downing Street.

That summarises the positions of Stern versus the likes of Nordhaus and Goklany. I agree with Nordhaus on this point too. That’s how Britain can have a “near-zero social discount rate” (as Nordhaus calls it) which is a result of the decision to emphasise intergenerational neutrality, while that idea would perhaps have difficulty sprouting wings, let alone taking flight, in America. This depends on how human life is valued: on an individual basis, or by group priorities, or preferring our present generation of voting and wealth-creating adults over future generations yet to “demonstrate their worth” (!) and, and how we view our survival at all costs. The ethics drive the economics in that, amongst other modelling decisions, the economic model can be selected to fit a national view of whether our generation is more important than future generations.

Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children.

~ Ancient American Indian Proverb