Econ­o­mists’ No­bel puts spot­light on cli­mate so­lu­tions

Sherbrooke Record - - EDITORIAL -

As the U.S. ad­min­is­tra­tion de­nies or down­plays cli­mate sci­ence, some more sen­si­ble Amer­i­cans have been re­warded for de­vel­op­ing cli­mate so­lu­tions.

Econ­o­mists Wil­liam Nord­haus and Paul Romer re­cently won the No­bel Prize in eco­nom­ics for their work on, re­spec­tively, “in­te­grat­ing cli­mate change into long-run macroe­co­nomic anal­y­sis” and “in­te­grat­ing tech­no­log­i­cal in­no­va­tions into long-run macroe­co­nomic anal­y­sis.”

The award is not with­out con­tro­versy, but it’s telling that such a pres­ti­gious hon­our went to peo­ple who of­fer prag­matic tools for ac­tion on an ur­gent cri­sis their gov­ern­ment re­fuses to even ac­knowl­edge.

Yale Univer­sity pro­fes­sor Nord­haus de­vel­oped a crude model in the 1970s to ex­plore how eco­nomic ac­tiv­ity af­fects the cli­mate sys­tem and the role pol­icy might play in so­lu­tions. He used it to demon­strate that putting a price on car­bon pol­lu­tion would be an ef­fi­cient tool for re­duc­ing emis­sions with­out harm­ing the econ­omy. Romer, a New York Univer­sity pro­fes­sor and World Bank chief econ­o­mist and se­nior vice-pres­i­dent un­til Jan­uary 2018, ar­gues poli­cies that fos­ter ed­u­ca­tion and in­no­va­tion and en­cour­age firms to de­velop new ideas can spur eco­nomic growth and novel so­lu­tions.

Therein lies the con­tro­versy. Both are main­stream econ­o­mists who be­lieve eco­nomic growth is the ul­ti­mate goal of so­ci­ety, and both have used mod­els ill-suited to un­der­stand­ing how growth af­fects the en­vi­ron­ment. Nord­haus has been crit­i­cized for fail­ing to un­der­stand the model used in the Club of Rome’s in­flu­en­tial 1972 re­port The Lim­its to Growth, and dis­miss­ing it based on his mis­un­der­stand­ing.

Many econ­o­mists and oth­ers ar­gue that eco­nomic growth is a poor way to mea­sure a so­ci­ety’s progress and that it con­trib­utes to is­sues like cli­mate change. “I would say [this prize] is the last hur­rah of a cer­tain old guard of the eco­nom­ics pro­fes­sion that want to pre­serve the idea of growth at all costs,” Ju­lia Stein­berger, eco­log­i­cal econ­o­mist at the U.K.’S Univer­sity of Leeds, told Sci­ence mag­a­zine.

Still, there’s no deny­ing Nord­haus and Romer’s in­flu­ence on cli­mate pol­icy and eco­nom­ics. Nord­haus’s car­bon pric­ing work is solid and has con­vinced many ju­ris­dic­tions to adopt it.

And Romer’s eval­u­a­tion of pos­si­bil­i­ties is re­fresh­ing. “Peo­ple think pro­tect­ing the en­vi­ron­ment will be so costly and so hard that they want to ig­nore the prob­lem and pre­tend it doesn't ex­ist,” he said af­ter the No­bel an­nounce­ment. “Once we start to try to re­duce car­bon emis­sions, we'll be sur­prised that it wasn't as hard as we an­tic­i­pated.”

Rather than time-wast­ing ar­gu­ments with peo­ple who re­ject cli­mate sci­ence or hu­man­ity’s role, these are the kinds of de­bates we should be hav­ing. Our eco­nomic sys­tem poses sig­nif­i­cant chal­lenges around global warm­ing. Some think it will take noth­ing less than over­turn­ing cap­i­tal­ism to ad­dress the cri­sis, while oth­ers be­lieve cap­i­tal­ism fa­cil­i­tates the kind of in­no­va­tion and change that can get us out of our mess. In be­tween, econ­o­mists and thinkers have pro­posed many ways of mea­sur­ing progress and de­vel­op­ing eco­nomic sys­tems that are com­pat­i­ble with sus­tain­able so­ci­eties.

Former World Bank econ­o­mist Her­man Daly launched a whole new re­search pro­gram in eco­log­i­cal eco­nom­ics with his pro­posal for “steady state eco­nom­ics.” Kate Ra­worth’s ideas about “dough­nut eco­nom­ics” show how hu­man well-be­ing can be achieved within plan­e­tary bound­aries. Most econ­o­mists fol­low­ing their lead agree that a healthy cli­mate re­quires us to move to a post-growth econ­omy with well-be­ing rather than in­creas­ing ma­te­rial wealth as the go

Nord­haus and Romer are speak­ing to con­ven­tional au­di­ences, but at least they’re speak­ing with con­vic­tion that hu­man­ity faces a cri­sis that must be re­solved — and they’re of­fer­ing so­lu­tions. Some of their ideas, such as pric­ing car­bon pol­lu­tion, are es­sen­tial; oth­ers fall within an eco­nomic par­a­digm that is in­creas­ingly be­ing ques­tioned.

That Nord­haus and Romer re­ceived a No­bel Prize for cli­mate work il­lus­trates a con­tra­dic­tion in the U.S. — and, by ex­ten­sion, the world — be­tween peo­ple and in­sti­tu­tions (in­clud­ing many lo­cal gov­ern­ments) work­ing to re­solve the cli­mate cri­sis and a na­tional gov­ern­ment and many in in­dus­try that have cho­sen to ig­nore the prob­lem and of­ten mis­lead the pub­lic about it.

Re­gard­less of what one thinks of these econ­o­mists’ work and whether or not it de­serves a No­bel, it’s re­fresh­ing to see a ma­jor eco­nom­ics prize rec­og­niz­ing work on cli­mate change and poli­cies that will en­able the tran­si­tion to an econ­omy pow­ered by zero-car­bon en­ergy sources.

David Suzuki is a sci­en­tist, broad­caster, author and co-founder of the David Suzuki Foun­da­tion. Writ­ten with con­tri­bu­tions from David Suzuki Foun­da­tion Se­nior Edi­tor Ian Han­ing­ton.

Learn more at www.david­suzuki.org.

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