Economic guesswork

'Discounting' The Future Cost Of Climate Change - Science News

Given that the economics of climate change are hot in the news again, I thought this explanation of discount rates was pretty good.

But still, my general attitude to all this is that it seems an absurd idea that economic modelling of the effects of climate change out to a century or so is anything other than pure guesswork.

The obvious reason is because of the uncertainties within climate science, even allowing that is basically right in its current estimate of likely global temperature increases. As the disruptive weather of the last 18 months is showing, it's not just heat waves to worry about, but floods, droughts, and possibly even unusually snowy winters at lower levels of the Northern Hemisphere. Everyone agrees that predicting regional effects is much less certain than the big picture, but this means we don't really know which population centres of particular economic importance are likely to be hit hard, and which get off relatively easily.

One of the largest consequences which I would have thought could be most important economically - sea level rise - is still very uncertain. If rate of sea level rise increases and it becomes clear that it will be at the top of the worst scenario forecasts, and thereby cause abandonment of major land areas and parts of some cities, how do you factor that into your economic forecasts now?

I guess this economic modelling is worth the exercise (and only attempted at all) as a way of trying to politically justify a certain level of current economic pain to offset future problems; but really, I find it hard to believe it can really be taken seriously as prediction if the actual effects of climate change are so difficult to predict.

It seems to me that using economics to work out the least costly method of getting to lower emissions is another matter, as that's comparing something that is relatively "here and now" and has aims which are in a more realistic time scale.

But the key point is, I think, average citizens wanting to see action on climate change should just be interested in serious movement to lower emissions done in a way that does not cripple the economy. Serious leadership on technological innovation that seems to be needed to achieve this will need to come as well.