Climate Change and Prudential Responsibility

1. Climate Change and Prudential Responsibility Lecture 2 Environmental Ethics in Teaching Social Sciences and Humanities The Third Summer School Nakhabino, Moscow July 1-15, 2009 Dale Jamieson New York University Dwj3@nyu.edu

2. Practical Responsibility • Prudential Responsibility • Moral Responsibility • Ethical • Political

3. Enlightened Self-Interest “We buy fire insurance for a house and health insurance for our bodies. We need planetary sustainability insurance.“ ---Stephen Schneider

4. What Are We Saying? We’re asking rich people who benefit from the prevailing world order to buy insurance • to protect poor people who are yet unborn • on the basis of predictions about the future from climate models, IPCC reports and so on.

5. What We Know Is That • Rich people typically do not feel responsible for their poor contemporaries, especially those across national boundaries • People do not behave economically rationally in much less complex insurance markets that directly affect their interests • We have no actuarial tables for the climate protection market in the way that we do for accidents and fires

6. Economic Concerns • Nordhaus (2006) • Optimal policy is a carbon tax of about $17 in 2005, ramping up to $270 in 2100 • Stern (2006) • Future economic damages could be 20% of global GDP • Optimal carbon tax now is $311

7. How do they get different numbers? • Different damage estimates because • Different damage models • Different discount rates Nordhaus discounts 3% for pure time preference while Stern discounts .1% Nordhaus thinks the choice of a discount rate is an empirical question while Stern thinks its an ethical question Neither adequately represents surprise or the possibility of catastrophic losses (cf Weitzman)

8. with the choice of particular discount rates.[1] [1] Adapted from Cowan and Parfit (1992)

9. What is going on? • Nordhaus • Aggregates damages • Identifies the marginal social cost of carbon • Searches for efficient mitigation strategies • Stern • Aggregates damages and identifies the marginal social cost of carbon but only to make explicit some trade-offs • Searches for efficient mitigation strategies • Evaluates pathways that avoid unacceptable atmospheric concentrations of GHGs

10. The Deep Differences • Nordhaus • is working towards a global benefit-cost analysis • which he takes as an empirical exercise • about which he thinks we can be confident • Stern • views climate change as a risk management problem involving great uncertainties and diverse values that cannot all be quantified • which has ethical dimensions that are central • about which we should not be very confident

11. Benefit-Cost Analysis Distorts Public Decision-Making • It assimilates public choice to what would be in the interests of a single, rational individual, whose preferences were complete, coherent, and consistent. • But communities are diverse, involving individuals with different interests, and are not (in the economists’ sense) perfectly rational or even, in many cases, aspire to be.

12. Benefit-Cost Analysis • Treats all preferences as commensurable, typically by monetarizing them. • But such diverse values as biodiversity protection, social solidarity, increments of income cannot always be put on the same scale, much less monetarized.

13. Benefit-Cost Analysis • discounts future benefits and costs since most of us prefer “jam today” to “jam tomorrow” • But present people are getting the jam and leaving environmental destruction for future people • Future costs and benefits disappear on high discount rates

14. Conclusion There are serious limitations to viewing climate change as a problem of prudential responsibility