I Don’t Buy Economists’ Case for Fighting Climate Change

Paul Collier rejects the utilitarian basis for reducing carbon emissions and replaces it with “a rights-based notion of ethics”:

I don’t buy economists’ case for fighting climate change, Paul Collier, Commentary, The Guardian: …In his Review on the Economics of Climate Change – widely regarded as the most important and comprehensive analysis of global warming to date – Lord Stern argued that in cold cost-benefit terms, it made sense for the present generation to make sacrifices because the benefits to future generations would be so substantial. …

Necessarily, this approach … depends …. upon a degree of ethical decency: if we thought only of ourselves, then our cost-benefit calculus would tell us to let the future fry. Stern’s analysis rests upon a utilitarian calculus that is standard in applied economics: each person, whether alive or yet to be born, counts as equal, except that giving the same benefit to someone who is rich counts as less valuable than giving it to someone who is poor.

Prior to the publication of the Stern review, the main battleground was scientific: is climate change a reality…? Post-Stern, that battleground has now shifted to ethics. …[T]he challenges have come from two ethical positions that … cannot be readily dismissed.

One challenge is the elitism … in overriding democracy: according to the utilitarian calculus the government should value the interests of the future far more highly than most voters would do. Indeed, if we are guilty of radically undervaluing the future, then this neglect applies not just to carbon emissions, but to all the other ways in which we could help the world of the future. The government should force us to save far more than we do… Are we radically neglecting the future by not saving enough? …

The other ethical challenge questions the transfer from the poor to the rich that would be implicit in reducing carbon emissions: we, the current generation, are the poor who are to make sacrifices for future generations, who are likely to be much wealthier than we are… And so, on the utilitarian calculus, radical egalitarians should be opposed to curbs on carbon: let the rich fry.

Personally, I doubt whether the utilitarian calculus is the right ethical framework … to think about global warming… Take the valuation of the future: are we radically undervaluing the interests of future people?

Of course, we cannot tell how the future will feel, but one simple test is to ask ourselves how we feel about the past – are we angry that our great-grandparents did not live more frugally so that we would now be richer? …

Is there an ethical basis for being concerned about global warming that does not depend upon the notion that quite generally we are radically negligent about future people? I think that there is, but this concern depends upon a rights-based notion of ethics rather than on utilitarianism. Most professional economists will at this point stop reading because they will think that rights are a quagmire. But here goes.

Natural assets such as biodiversity, and natural liabilities, such as carbon, are not owned by the current generation, because we did not create them. We have them because previous generations passed them on to us, and we are obliged to do the same. If we deplete natural assets, or run up natural liabilities, we have an obligation to compensate future generations…

It is fairly obvious that adequately compensating the future for letting it fry is likely to be a more expensive undertaking than curbing our carbon emissions. Remember that future people are likely to be much richer than we are, and so what they would regard as fair compensation would be prodigious. …

Ultimately, in a democracy our policy decision rules must rest on ethical principles that are widely shared by citizens. I suspect that most people feel that they should reduce carbon emissions, but the key issue is why? Is their motivation better captured by the utilitarian calculus used by economists, or by a sense of custodial obligation towards our natural legacy, of which carbon is but one instance?


Originally published at the Economist’s View and reproduced here with the author’s permission.