Climate Change

Yves here. In addition to the important reasons given below for shutting economists out of the debate on climate change, an additional one is even Nicholas Stern fell for trying to look at climate change in net present value terms. As anyone how has built financial models will tell you, pretty much anything that happens more than 30 years out is ascribed no value because just about any positive interest rate will result in very long term impacts being discounted to zero.

For some time, the Earth’s natural resources have been depleted faster than they can be replaced. The Intergovernmental Panel on Climate Change has set a 2030 deadline to reduce heat-trapping emissions by half to avoid climate change that is both irreversible and destructive.