Perhaps this post should run on Earth Day. According to economic models of climate change, a warming of the planet will result in a reduction of “our” well being. Before I get to my point today notice that this argument also requires being clear about whether we are considering aggregate effects or individual ones. For now ignore that distinction which we said more about in yesterday’s post.
Today instead ask why a warmer planet would prove “costly” and consider the implications, one of which is understood and another which is rarely uttered in polite company.
First the reason a warmed planet is costly is that it will “force” adjustments to our behavior. No reason to go through what all of that is, but for example different groups will do better in different places as the climate warms. Adjusting to this takes time and will be costly. It’s not clear however that once this adjustment is made that a warmer planet will be any more costly than it was previously. I am almost sure that the prior sentence is going to be wildly misunderstood. We will say more about that in a future post.
But… But… we’re only talking about costs here (or net costs). Just as some people wish to impose a naturalist sort of ethical dimension to the computations of climate change’s costs, then it seems reasonable to add in the utility benefits a warmer planet will bring. Rising seas are a cost, yes, because we must adjust, but once they’ve risen maybe more pleasure will be had from the new variety of coastline? Maybe people prefer a warmer planet to a less warm one? And maybe this is true in spite of whatever risks may come. Isn’t this to be accounted for? After all, this sort of reasoning us used commonly elsewhere? Or are we to only focus on measurable costs and benefits?
But the more important point, which is not original to me, is that if sea levels fell it’s not the case that this is costless or even a benefit. If the planet cooled it’s not the case that it would be costless or a benefit. Since the planet is not optimized for us, and we adjust according to what it throws at us, then ANY climate change has to impose costs (and changes to utility). For example, almost all existing harbors would be rendered useless if the sea levels fell – many would be dry and inland!
I’m not going to discuss the policy implications of this today nor other insights. But to chum the waters a bit, I think it is possible to imagine a reasonable set of assumptions that can deliver a result that ANY change to the climate will make “us” better off once we consider both utility and direct benefits and costs of climate change. But that’s for another day.