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.”
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.
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)
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, 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 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.
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. Researchers who collaborated with Nordhaus to develop the model include David Popp, Zili Yang, and Joseph Boyer.
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.
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".
Worry less about branding a “progressive capitalism” and more about the end of neoliberalism.
A comprehensive agenda must focus on education, research and the other true sources of wealth. It must protect the environment and fight climate change with the same vigilance as the Green New Dealers in the US and Extinction Rebellion in the United Kingdom. And it must provide public programmes to ensure that no citizen is denied the basic requisites of a decent life. These include economic security, access to work and a living wage, health care and adequate housing, a secure retirement, and a quality education for one’s children.
This agenda is eminently affordable; in fact, we cannot afford not to enact it. The alternatives offered by nationalists and neoliberals would guarantee more stagnation, inequality, environmental degradation and political acrimony, potentially leading to outcomes we do not even want to imagine.
I will be reporting soon on this text by Saito that won the 2018 Deutscher Memorial Prize.
But today, no one really believes in this all-encompassing omnipotence of Marx’s theory, and the Marx-Engels-Gesamtausgabe (MEGA) makes Marx’s engagement with natural sciences clearly visible. Thus, we need to find an alternative approach to Marx’s texts, and it is a chance to utilize the openness of Marx’s project in a productive way with new materials. In other words, by looking at his economic manuscripts as well as his notebook on natural sciences, we can learn from Marx how to develop ecological critique of capitalism in the 21st century. This is an urgent practical and theoretical task for today’s left, as humans are now facing a serious global ecological crisis under neoliberal capitalism.
Your book is dedicated to rescuing Marx’s ecological critique of capitalism, continuing the work undertaken by ecosocialists like Paul Burkett and John Bellamy Foster. Why do you think Marx’s ecological analysis is so important to the left and to environmentalists today?
Yes, my approach is a clear continuation of the “metabolic rift” theory advocated by Foster and Burkett, and one of the aims of my book is to defend the concept of metabolic rift against recent criticism raised by Jason W. Moore. It is quite apparent today that mass production and consumption under capitalism has tremendous influence upon global landscape and causes ecological crisis. Marxist theory thus also needs to respond to the situation with a clear practical demand to envision a sustainable society beyond capitalism. Capitalism and material conditions for sustainable production are incompatible. This is the basic insight of ecosocialism.
I think Naomi Klein’s This Changes Everything has provided a very convincing and concrete analysis of how the regeneration of the Marxist idea of metabolic rift can open up new imagination for an ecosocialist project in the 21st century. She shows that such radical movements are already emerging, and their goals are actually worth striving for. As she argues, it is necessary to reduce a large amount of carbon emission every year starting from now on in industrial countries, if increase of average global temperature in 2100 should be contained within 2 degrees Celsius. But it is not possible for capitalist global elites and companies to accept this demand because they know that such project is incompatible with necessary conditions of capital accumulation.
This is why the Paris agreement is insufficient to achieve the required reduction of carbon emissions, but Trump cannot accept even that level of carbon reduction. We have been too often witnessing global elites’ total incompetence to take any serious measure against climate change in the last decades. We should realize that the problem is not simply neoliberalism but capitalism as such. This is why Klein also now clearly advocates ecosocialism, “a new form of democratic eco-socialism, with the humility to learn from Indigenous teachings about the duties to future generations and the interconnection of all of life, appears to be humanity’s best shot at collective survival.” The antagonism between red and green needs to be dissolved.
Important to this is the application of material flow analysis as having a natural homology for capital circulation analysis in dimensions viable for political economy analysis.
In Capital, Marx integrated his materialist conception of nature with his materialist conception of history. Fertility, Marx argued, was not a natural quality of the soil, but was rather bound up with the social relations of the time. By conceptualizing the complex, interdependent processes of material exchange and regulatory actions that link human society with non-human nature as "metabolic relations," Marx allowed these processes to be both "nature-imposed conditions" and subject to human agency, a dynamic largely missed, according to Foster, by the reduction of ecological questions to issues of value.