That’s Bjorn Lomborg’s latest book on global warming. He has good arguments against the exaggerations of others, so this book is worth reading. I cannot, however, agree with one of his central claims, namely that the most serious economic research favors only mild remedies or sees the problem as only a moderate one.
I would instead claim the following:
1. Policy recommendations are extremely sensitive to the choice of discount rate, and economists do not agree on this issue. Furthermore most economists do not even know enough moral philosophy to understand the issues involved (and the philosophers don’t understand enough economics), so there is no coherent consensus one way or the other.
2. The most current economists’ word is from Martin Weitzman; he argues that the very high costs of the worst-case scenarios suggest an insurance-based case for significant worry, more worry than Lomborg suggests. A Salon review notes:
Harvard’s Weitzman puts the current concerns of many economists
clearly. Based on the findings of the U.N. climate panel, he notes that
with roughly 3 percent probability, "we will [live in] a terra
incognita biosphere within a hundred years whose mass species
extinctions, radical alterations of natural environments, and other
extreme outdoor consequences of a different planet will have been
triggered by a geologically-instantaneous temperature change that is
significantly larger than what separates us now from past ice ages."
3. We spend too much time wondering about what is "most believable" and not enough energy worrying about the expected value of pending losses. The major critical reviews all nail Lomborg for neglecting this point. That said, the speed with which the negative reviews of the book move to the extreme cases is itself noteworthy, and it does not exactly correspond to the image presented to the public.
4. Given that the value of risk is context-specific, economists are bad at taking the value of insurance from market data in one setting, and then transplanting that estimate to another setting.
5. The strongest argument against significant action is not from cost-benefit analysis in the narrow sense, but simply that we are not very good at producing international public goods. Especially when it comes to extended, intertemporal collective action problems directed against small probability events, with unclear periodic feedback, and dealing with the Chinese and the Indians, who feel they have the right to pollute as much as we did, and also with the not-nearly-as-cooperative-as-they-might-sound Europeans (how’s that sentence for a mouthful?).
This argument sounds immoral and indeed perhaps is immoral — "we’re ruining things for others, yet if we tried to fix things we would ruin the fixing, so let’s do nothing." Yet I do not think this issue should be disregarded. If I can’t open up my computer, dissemble it, and then put it back together again, surely my repair plans should take that fact into account.
Remember that line from Dirty Harry?: "Do you feel lucky, kid?"