One of the most interesting topics right now is how to allocate risks and costs with respect to environmental problems like climate change. I’m having an email discussion with my good pal John and thought I’d bring some of that online for others to comment:
RE: Cost Benefit Analysis and Environment:
John’s: It is very easy to distort their definitions towards a point of view rather than towards something necessarily valid. Not that cost/benefit is never useful. It is very useful when the costs and benefits are relatively simple to define. Unfortunately costs from environmental degradation and benefits from efforts to change behavior are very difficult to delineate. In the end through the early environmental movement persistence and intelligent thinking about clean water and air prevailed over those who used cost/benefit analysis.
Joe: Very good points except I’m not at all convinced about your last sentence. I used to agree with that but (without enough research) I’d say we needed cost benefits and failed to do them, leading to massive spending or bans on things that had little impact on the overall quality or simply shifted industrial damages to poor countries. I’ve lost a LOT of respect for mainstream US environmentalism because I think it is not a global perspective and it’s mostly emotional rather than analytical, leading to bizarre policy and spending recommendations that don’t line up with long term planning and well being. Kyoto – now partially discredited even in environmental camps as an ineffective and bad approach – is an excellent example of how emotion drives policy.
Although there is enough right wing froth to confuse the analysis, another example of emotion trumping reason seems to be the Silent Spring / DDT ban which as far as I can tell will eventually be seen as one of the greatest and catastrophic (in terms of lives lost) errors of environmental thinking – though it would be very hard to model/evaluate the damages to ecosystem if we’d kept spraying. Still, the facts suggest we had a moral imperative to keep using DDT which would have saved *tens of millions* who have since died from Malaria. If those had been US kids there is NO WAY the ban would have stuck.
The same imperative – I would argue – that should focus us on malaria and malnutrition while we should largely ignore climate change.
You are certainly right about Lomborg being a lightning rod for controversy, but I’d encourage you to look at his TED talk or other writings. I’d suggest he’s a very clear thinker, pilloried unfairly by the vested interests of an increasingly entrenched climate and environmental bureacracy. It’s not logical to think that the public sector is above all economic and political influences while the private sector is a prisoner to them. Both are compromised, which is why the clearest voices come from people like Lomborg who have no dog in the fight other than “optimizing human experience”. We can disagree about how to optimize things, but I want to hear more from people who have no stake in how we allocate resources. That leaves out industry scientists …. and NASA as well, leaving us with thin pickings. Still, I’d argue strongly – very strongly – that the best policy recommendations are coming from the economists who are looking at both costs and benefits.
Comments very welcome!