Re: [asa] Copenhagen Consensus on Global Aid (Warming)

Yes. "Cost" and "benefit" don't necessarily mean "money" though. The
terms used are "utility," "welfare," and "payoffs," so a "cost" or
"benefit" could be, say, a "unit" of peace of mind or something like that.
And much modeling is game theoretic, which doesn't necessarily assume a
static tradeoff between costs and benefits. Still, at the end of the day,
economic models are efforts to quantify some notion of costs and benefits
and to rationalize behavior based on some consequentialist notion of welfare
maximization.

On Sat, Jun 7, 2008 at 5:31 PM, PvM <pvm.pandas@gmail.com> wrote:

> Is all economic modeling purely based on the cost benefit ratio? That
> seems rather worrisome because it fails to incorporate so many other
> issues.
>
> On Sat, Jun 7, 2008 at 2:26 PM, David Opderbeck <dopderbeck@gmail.com>
> wrote:
> > I'm not sure I understand the objection. All economic modeling is
> > cost-benefit analysis; without cost-benefit analysis, we can't do any
> > rational economic work at all on climate change.
> >
> > I like Yohe's notion of a "portfolio" approach:
> >
> > <quote>Fighting climate change can be a sound investment, even though
> > neither mitigation nor adaptation alone will be enough to "solve" the
> > problem. To make a real difference, especially in the near term, the
> world
> > must combine mitigation and adaptation with increased research and
> > development into carbon-saving and sequestering technology, which in turn
> > requires designing and exploiting market-based incentives. </buote>
> > (http://www.project-syndicate.org/commentary/yohe1)
> >
> > On Sat, Jun 7, 2008 at 4:59 PM, PvM <pvm.pandas@gmail.com> wrote:
> >>
> >> My main objection is that the consensus looks at cost-benefit. In
> >> other words, investment of a single dollar returns x dollars.
> >> Furthermore the budget is limited and has to be divided amongst
> >> competing cases. But what is the cost of ignoring global warming on
> >> health and hunger, one of the other causes involved? The impact of
> >> global warming will be much more extreme for developing countries.
> >>
> >> Yohe's damages estimates are based on a study which is on the lower
> >> end of the damage estimate spectrum. It also ignores that early
> >> action may be far more relevant than letting the climate changes reach
> >> a potential 'tipping point'
> >>
> >>
> >> <quote> Applying benefit-cost analysis to a technology-based program
> >> aimed at stabilizing climate is a dubious proposition. The results,
> >> timing, scalability of successful technologies, and success in
> >> reducing their costs on the one hand, and the climate change damages
> >> avoided (benefits) on the other are so uncertain as to make benefit
> >> cost assessment little more than impressionistic. Of more concern is
> >> that benefit cost ratios could easily distract from the message of the
> >> paper: that not only is the technology challenge to stabilization
> >> huge, but analyses that use emission scenarios as baselines
> >> systematically understate the magnitude of the challenge.
> >> </quote>
> >>
> >> On Sat, Jun 7, 2008 at 10:44 AM, David Opderbeck <dopderbeck@gmail.com>
> >> wrote:
> >> > Fair enough. What are the specific problems with the models in the
> >> > Copenhagen report?
> >> >
> >> > On Sat, Jun 7, 2008 at 1:03 PM, PvM <pvm.pandas@gmail.com> wrote:
> >> >>
> >> >> That's not what I said.
> >> >>
> >> >> On Sat, Jun 7, 2008 at 9:47 AM, David Opderbeck <
> dopderbeck@gmail.com>
> >> >> wrote:
> >> >> > So, unless one thinks a priori that global warming is the top
> >> >> > priority,
> >> >> > one
> >> >> > can't create a scientifically valid economic model to measure and
> >> >> > rank
> >> >> > priorities? Sounds upside down to me.
> >> >> >
> >> >> > On Sat, Jun 7, 2008 at 12:23 PM, PvM <pvm.pandas@gmail.com> wrote:
> >> >> >>
> >> >> >> Of course, if one is skeptic of the fact of global warming then it
> >> >> >> is
> >> >> >> unlikely that one will consider it to be a relevant priority.
> >> >> >> Garbage
> >> >> >> in, garbage out and no economist is going to make a difference
> when
> >> >> >> the assumptions are flawed. However, worse, the mistake is to look
> >> >> >> at
> >> >> >> short term versus long term impact.
> >> >> >>
> >> >> >>
> >> >> >>
> >> >> >>
> >> >> >>
> http://www.realclimate.org/index.php/archives/2006/07/the-copenhagen-consensus/
> >> >> >>
> >> >> >> On Sat, Jun 7, 2008 at 6:06 AM, David Opderbeck
> >> >> >> <dopderbeck@gmail.com>
> >> >> >> wrote:
> >> >> >> >
> >> >> >> > The Copenhagen Consensus released a report on what sorts of
> >> >> >> > international
> >> >> >> > investment will likely produce the most return for humanity.
> See
> >> >> >> > here:
> >> >> >> > http://www.copenhagenconsensus.com/Default.aspx?ID=788
> >> >> >> >
> >> >> >> > Top of the list: micronutrients, lowering trade barriers,
> >> >> >> > deworming.
> >> >> >> > Middle of the list: R&D for low carbon technology. Bottom of
> the
> >> >> >> > list:
> >> >> >> > global warming mitigation. Not on the list: population control
> >> >> >> > (though
> >> >> >> > it's not clear this was studied).
> >> >> >> >
> >> >> >> > It is fair to note, of course, that the Copenhagen Consensus
> >> >> >> > project
> >> >> >> > is
> >> >> >> > headed by Bjorn Lomborg, author of "The Skeptical
> >> >> >> > Environmentalist."
> >> >> >> > But
> >> >> >> > the panel included some pretty impressive economists, including
> >> >> >> > nobel
> >> >> >> > laureate Vernon Smith (inventor of the "combinatorial auction"
> for
> >> >> >> > wireless
> >> >> >> > spectrum and other infrastructure resources), and others.
> >> >> >> > --
> >> >> >> > David W. Opderbeck
> >> >> >> > Associate Professor of Law
> >> >> >> > Seton Hall University Law School
> >> >> >> > Gibbons Institute of Law, Science & Technology
> >> >> >
> >> >> >
> >> >> >
> >> >> > --
> >> >> > David W. Opderbeck
> >> >> > Associate Professor of Law
> >> >> > Seton Hall University Law School
> >> >> > Gibbons Institute of Law, Science & Technology
> >> >
> >> >
> >> >
> >> > --
> >> > David W. Opderbeck
> >> > Associate Professor of Law
> >> > Seton Hall University Law School
> >> > Gibbons Institute of Law, Science & Technology
> >
> >
> >
> > --
> > David W. Opderbeck
> > Associate Professor of Law
> > Seton Hall University Law School
> > Gibbons Institute of Law, Science & Technology
>

-- 
David W. Opderbeck
Associate Professor of Law
Seton Hall University Law School
Gibbons Institute of Law, Science & Technology
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