Page 168 - Environment: The Science Behind the Stories

Year message—that it’s cheaper to deal
2000 2050 2100 2150 2200 with climate change now than later—
0 was robust across all discount rates
up to at least 1.5%.
Percent loss in GDP per capita -10 Baseline climate change of a discount rate is an ethical deci-
-5
At the end of the day, the choice
sion on which well-intentioned people
-15
may differ. As governments, busi-
-20
nesses, and individuals begin to invest
in addressing climate change, the
-25
Severe climate change
-30
how ethics and economics remain
with nonmarket impacts
intertwined.
-35 Severe climate change debate over the Stern Review reveals
Addressing global climate
FIguRE 1 Baseline climate change forecast by the IPCC could decrease global per capita change is becoming urgent, as
gDP by 5.3% annually by the year 2200. Severe climate change could bring annual the climate is changing faster than
losses of 7.3%—and adding nonmarket values (pp. 168–169) raises this figure to 13.8%. scientists had predicted just a
Gray-shaded areas show ranges of future values judged statistically to be 95% likely; darkest gray indicates few years ago. Stern announced
where ranges overlap for all three lines, and lightest gray for just one line. Data: HM Treasury, 2007. Stern that newer scientific forecasts of
review on the economics of climate change. London, U.K. accelerated change mean that it
is becoming even more expensive
to mitigate global warming than
typically choose discount rates close to A 3% rate means that a person born the Stern Review had calculated.
those Nordhaus suggests. Nordhaus in 1995 is valued only half as much Instead of 1% of GDP annually, the
argued that the Stern Review’s near- as a person born in 1970. It means world would need to spend 2% of
zero discount rate overweights the a grandchild is judged to be worth GDP each year in order to control
future, forcing people today to pay too far less than a grandparent simply climate change, Stern said—and
much to address hypothetical future because of the dates they were born. that was in 2008.
impacts. For various reasons, Stern argued, the Since then, Hurricane Sandy,
In their response to Nordhaus market should not be used to guide the drought of 2012, and other
and other critics, Stern and his team ethical decisions. climate-related disasters have made
argued that discount rates of 3% Stern’s group also published clear that the costs of inaction will
or 1% may be useful for assessing sensitivity analyses that exam- be immense. These developments
development projects but are too high ined how their conclusions would are all helping drive home the same
for long-term environmental problems vary under different discount rates. message: The more quickly we get
that directly affect human well-being. These showed that the report’s main going, the better off we’ll be.

What accounts for this divergence in views between resources can be exploited only at limited rates. If our popu- CHAPTER 6 • Ethi C s, E C ono mi C s, A nd s ustA in A bl E dE v E lopm E nt
Cornucopians and Cassandras? It may be because we are lation and consumption continue to grow and we do not shift
living in a unique time of transition. Throughout our long pre- to full reuse and recycling, we will continue depleting our
history and most of our history, we have lived in a world with natural capital, putting greater and greater demands on our
low numbers of people. In such an “empty world,” we could capacity to innovate.
always rely on being able to exploit more resources. Today,
however, the human population is so large that it is beginning
to strain Earth’s systems and deplete its resources. In this new WEIGHInG THE ISSUES
“full world,” we are encountering limits. Because we are still
learning what those limits are, people have a wide diversity CoRnUCoPIan oR CaSSanDRa? Would you
of viewpoints. consider yourself more of a Cornucopian or a Cassandra?
As we will see with many issues, both Cornucopians Which aspect(s) of each point of view do you share? Do
and Cassandras make valid points. Cassandras have often you think our society would be better off if everyone were
underestimated our ability to innovate and adapt—yet ulti- a Cornucopian or if everyone were a Cassandra—or do we
mately, all nonrenewable resources are finite, and renewable need both? 167

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