This dialogue on global warming between Ryan Avent and Jim Manzi is outstanding. It’s fairly technical, so I really recommend you watch the entire thing rather than jumping in for a particular segment.
To summarize, Manzi argues that aggressive steps to limit global warming are prohibitively expensive given their probable impact on economic growth. While he concedes that anthropogenic global warming is happening, he suggests our response should be limited to targeted R&D efforts.
I originally assumed that a revenue-neutral carbon tax – modeled on, say, British Columbia’s recent approach – would be the most elegant solution to runaway global warming. If I was forced to choose between taxing carbon and an overly-complicated cap-and-trade scheme, I’d still choose a carbon tax, but I’ve begun to see the wisdom of a more cautious approach.
That said, one thing Manzi’s model doesn’t adequately account for is the human toll of global warming in the Third World. Given the extreme poverty of underdeveloped countries, climate change could devastate entire regions in Africa and Southeast Asia and still not exact an economic cost comparable to a prolonged recession in the United States. From a purely economic perspective, this may look like a favorable trade-off, but do we really believe that an impending Third World catastrophe is less important than slow(er) growth in the United States?
I don’t mean to downplay the positive effects of economic expansion in the developed world. Higher wages, more productivity, and better goods all have an appreciable impact on our collective quality of life. But in many respects, furthering the United States’ economic prospects will have only a marginal effect on humanity’s cumulative well-being. Our high standard of living is already unprecedented in history, and while further improvements are welcome, slightly retarding progress in the name of keeping Bangladesh above water sounds pretty reasonable to me.
Quantifying the impact of global warming on our planet’s cumulative well-being is a tricky proposition, but that doesn’t mean we shouldn’t at least try to assess the potential for human misery in the wake of massive natural disasters. And while I’m suspicious of unleashing a new regulatory infrastructure to curb CO2 emissions, I worry that a purely economic decision-making calculus may not capture the true costs of climate change.