Saturday, June 14, 2014

The World Congress of Environmental and Resource Economists 2014

In two weeks many of the world's environmental and resource economists will gather in Istanbul Turkey.  I will give one of the three keynote talks and I will focus on climate change adaptation and cities.   Adaptation is the awkward topic that many intellectuals (including many Ph.D. environmental economists) feel uncomfortable talking about.  Why is that?  In this blog post, I offer some conjectures;

1.  Intellectuals genuinely worry that the world is going to hell.   Long run trends in improvements in well being as measured by rising life expectancy, heights, and the number of people on the planet are waived off as mere short run phenomena that will evaporate in the coming days of reckoning.  

2. Intellectuals love behavioral economics and the view of the average Joe as a short sighted myopic moron.  Consider this old quote I wrote about Jared Diamond and the vision he advanced in his book Collapse and in his NY Times piece. 

"Expectations of future scarcity create incentives to innovate now. Implicit in Diamond's work is a type of mass behavioral economics myopia where he and few other "wisemen" are the only one's aware of the coming day of scarcity. I am more democratic and optimistic that if there is a future arbitrage opportunity that a few ambitious young capitalists will seek out the profit opportunities and be ready with the next "Toyota Prius" that will help to mitigate future scarcity challenges." source 

3.  Intellectuals genuinely believe that any discussion of progress and the adaptive ability of capitalism to reinvent itself in the face of an ambiguous but anticipated threat (i.e climate change) lulls middle class voters to refuse to take their medicine and adopt higher taxes now.  This view implicitly assumes that we (the intellectuals) have to scare the heck out of people to get them to take action now.

4.  Trust in the ability of free markets to improve all of our quality of life is at a record low.  While the elites tweet away on free market supplied phones and take Uber to where they want to go and fly airlines to attend their conferences, the government is viewed as the key mechanism for supplying public goods.

In the case of climate change adaptation, an alternative vision is that the free market offers many adaptation strategies for coping with evolving new risks.  Risks for one group equals opportunities for those entrepreneurs who can devise solutions.  As I discuss in Climatopolis, there are many cases in which government will be the main hindrance of adapting to climate change.  One example is water pricing in drought prone areas.   To download an early draft of my slides for my Istanbul talk click here.