Thursday, April 21, 2011

The Climate Policy Wars and the Deep Recession

cross post about the challenges of fighting climate change during a recession.

Switching subjects, the Wall Street Journal has published an editorial that mocks the UN for making a big deal in 2005 about the possibility of millions of "climate refugees" by 2010. The WSJ argues that this is "proof" that climate "alarmists" overstate the impacts of climate change.

As I discuss at length in Climatopolis, I think that it is prudent for forecasters to announce possible climate change scenarios to act as a "heads up" for households, firms and governments.  The ironic item here is that by providing an early warning system, this actually lowers the probability that the events in question actually take place.  Expectations can cause investments that mitigate the damage that might have been caused had no pro-active steps been taken. In English, if the Titanic had seen the iceberg earlier -- it could have changed course.

So, the UN won't win a Nobel Prize in science and it would be great if they rely on the best consensus climate science but I have no problem with them issuing alerts about likely new challenges we will face in the future.  Investment under uncertainty will continue to be a major issue in economics, climate change adaptation and public policy.