Tuesday, December 28, 2010

A Response to Fellow Climate Change Nerds

Grist has republished an angry review of Climatopolis.  Permit me to make two points about myself and my work on the economics of climate change.

1.  I would love to see the world reduce its greenhouse gas emissions but I don't believe that we will in medium term.  Why?  You can read my academic papers on this subject here and here and especially here.

2.  Given that global GHG concentrations will rise and given the uncertainty over what will happen next in terms of weather fluctuation and how this risk differs across continents and cities within contents, it is relevant to ask how diverse households, firms and governments will respond to the new realities they will face in our hotter world.  Climatopolis is my attempt (as a microeconomist) to anticipate how we individually and collectively respond to an anticipated known "unknown".

For a brief sketch of the book's core logic read this.

To listen to me talk about the micro economics of climate change adaptation watch this.

I'm trying to start an intellectual debate --- I won't be shouted down by interest groups who are afraid of intellectual discovery and debate.

Yes, I am an economist. Yes I know I can learn from climate scientists but right now their predictions about our future have large confidence intervals. I am optimistic that they will make progress in making more accurate predictions for the new risks that cities will face and that rational households and firms will respond to this new information in new ways that will shield them from climate change's blows. This doesn't mean that adaptation will be costless.  But, in a world where we refuse to mitigate (the free rider problem) --- we have a great capacity to adapt to the new realities we face.  At the heart of my optimism is that we are forward looking, and make investments to protect ourselves from anticipated known unknowns.  I also have great faith in capitalism to produce new products to shield us from new risks we will face. Capitalism is a friend of climate change adaptation.  Before Climatopolis, this point has not been thought through in sufficient detail.

My critics need to return to microeconomics and explain why the incentives and investments won't help to protect us from climate change's future punches.