Extinction Rebellion peaceful protest against the climate crisis - Newport, Isle of Wight, May 2019
There are always contingencies, and it’s worse with the global climate crisis. You’d think the 2018 Nobel Prize recipient would have a handle on this, but capitalism has never been good about expectations, especially in terms of the environment.
I once asked the then Moscow bureau chief of the NY Times in a graduate seminar about the historical responsibility of writing for the “paper of record”. He could have answered it personally or institutionally, but I got an unsatisfactory answer probably because the graduate program was still doing joint research work with the Soviets. No one likes ever being quoted verbatim, even if it would be “off-the-record”, and not a “known-answer question”. Then again, my expectations were for something thoughtful at least.
Similarly, criticizing Nobel Prize recipients might not represent any significance, but post-Keynesian Steve Keen has written on the historical failure of William Nordhaus’s neoclassical estimates of the economic damage from the Climate Crisis. As Kohei Saito says “humans are now facing a serious global ecological crisis under neoliberal capitalism.” but we’re still short on expectations.
In a recent article Steve Keen rolls the Nordhaus DICE model during a long march down a winding road toward (democratic) eco-socialism. It remains for political economy to drag it over the historical finish line.
Trump’s team of climate science deniers wants to pretend CO2 has no economic cost, and therefore no significant climate action or regulation is justified.
William Nordhaus’s pessimism is more justified on the basis of Trump’s election, a point he makes in passing: “Moreover, from the perspective of political economy in different countries as of December 2016, the prospects of strong policy measures appear to be dimming rather than brightening.”
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While Nordhaus expected, as any sane person, the lack or even nullification, of strong policy measures in a Trump administration, his own model is flawed, as Keen observed. This is problematic as the DICE/RICE model is as paradigmatic as its reliance on neoclassical assumptions. Much like so many macro problems the proof remains to be tested at the level of its micro-foundations. The reality is that there are still deep flaws in the estimates from a model so pivotal to US government policy, despite the idiot in the WH.
Extinction Rebellion (abbreviated as XR) is a socio-political movement which uses nonviolent resistance to protest against climate breakdown, biodiversity loss, and the risk of human extinction and ecological collapse.[1][3][4]
Extinction Rebellion was established in the United Kingdom in May 2018 with about one hundred academics signing a call to action in support in October 2018,[5] and launched at the end of October by Roger Hallam, Gail Bradbrook, Simon Bramwell, and other activists from the campaign group Rising Up![6] In November 2018 various acts of civil disobedience were carried out in London.[7] In April 2019 XR occupied four prominent sites in central London: Oxford Circus, Marble Arch, Waterloo Bridge and the area around Parliament Square.
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William Nordhaus's estimates of the potential economic damage from Global Warming are nonsense. They are also one of the key reasons why policymakers have not taken the threat seriously. If Extinction Rebellion is going to make policymakers take Climate Change seriously, then one of their first targets must be Nordhaus and his DICE model.
- Globally governments have been unwilling to tackle a problem of this magnitude. In 2015, the UN Paris Agreement on Climate Change was signed by world leaders to limit global warming to 2°C above pre-industrial levels. However, scientific evidence now tells us that our leaders have not taken enough action and we are still on a path to reach 3-4°C, which will be catastrophic to all life on Earth. (https://rebellion.earth/the-truth/demands/, May 3rd 2019)
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This gap alone should provoke action, but capitalism continues to position profit ahead of the potential of massive destruction that could be misconstrued by Trumpians and others as “creative”.
The RW Heritage Foundation would, as expected, criticize the model simply because it represents a regulatory effort. But while Keen’s criticism could be seen as supportive in terms of discount rates[35][36], it points more to how tipping points are configured, which should also point to regional differences and as a matter of scale, to microfoundations of damage functions.
Notwithstanding global capital inequality, this is the problem of estimating global GDP and global temperatures that nurtures global denialism and policy inaction. Tipping points are spatially and temporally distributed. They are symptomatic of material flow in the world and in everyday life.
Nordhaus's Damage Function is the first substantive graphic in the DICE manual, and one look at it (see Figure 8) should give anyone—even Climate Change Deniers (CCDs)—cause for concern. Even if Anthropogenic Global Warming were a myth, even if the temperature rise was being caused by the Sun, would it really be true that a 5 degree increase in the average temperature of the globe would only reduce global GDP by 5 percent?
This alone is enough to reject outright Nordhaus's assurances about the manageability of climate change. Nordhaus has put the world into a Dirty Harry movie gone bad: having advised policymakers that a simple and low tax on carbon is a Magnum 44 for shooting climate change, they scoff at the danger, telling climate change "'Do you feel lucky, punk?". In reality, climate change is armed with a howitzer, and the policy Nordhaus recommends—letting the global temperature reach levels 4 degrees above pre-industrial levels—would unleash that howitzer. www.patreon.com/...
Figure 3: Nordhaus's Damage Function, showing the estimated reduction in GDP for an increase in global mean temperature
This is not, as is sometimes believed, the result of Nordhaus applying a high discount rate to the impact of climate change in the distant future. This instead is his estimate of how much lower global GDP would be in the future—say, 130 years from now—compared to what it would have been, if temperatures had instead remained at pre-industrial levels. Given the urgency that characterises the Global Warming debate, this is, on the face of it, an extremely benign view of the impact of an increase in the global average temperature on GDP.
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This long-run future is more about metabolic rift rather than the reductionism of carbon modeling. Even as some will be triggered by the specter haunting the globe of “ecosocialism”, the climate crisis may require it. We expect much more from policy. Nordhaus makes a noble effort to not prioritize political economy but the planet’s ecologies will necessitate it.
The Dynamic Integrated Climate-Economy model, referred to as the DICE model or Dice model, is a computer-based integrated assessment model developed by 2018 Nobel Laureate William Nordhaus that “integrates in an end-to-end fashion the economics, carbon cycle, climate science, and impacts in a highly aggregated model that allows a weighing of the costs and benefits of taking steps to slow greenhouse warming." Nordhaus also developed the RICE model (Regional Integrated Climate-Economy model), a variant of the DICE model that was updated and developed alongside the DICE model.[1][2][3][4] Researchers who collaborated with Nordhaus to develop the model include David Popp, Zili Yang, and Joseph Boyer.[2]
The DICE model is one of the three main integrated assessment models used by the United States Environmental Protection Agency, and it provides estimates intermediate between the other two models.[4][5]
There is one sentence in this paper, and only one sentence (in the paper's third paragraph), which could be construed to support Nordhaus's interpretation that the absence of "sharp thresholds or tipping points" in his Damage Function is "consistent with the survey by Lenton". It is the statement that:
Many of the systems we consider do not yet have convincingly established tipping points. {Lenton, 2008 #5678, p. 1786} However, the point of the paper was to try to quantify those tipping points—not to argue that they don't exist! …. the very reference that Nordhaus uses to justify not having a tipping point in his Damage Function establishes that his Damage Function should have a tipping point. www.patreon.com/...
Paraphrasing this, "if there aren't tipping points in the global climate, then you can use my model to guide policy; but if there are, you're on your own". That's about as useful as a car without a steering wheel. It will work fine if you're on a straight road, but if the road bends, you're dead. And Climate Change is the ultimate "long and windy road".
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