Climate change economics and discounted utilitarianism
AbstractIn the recent debate on climate change economics triggered by the Stern Review and his opponents, fundamental methodological issues emerge. It becomes obvious that different choices for some variables in the models applied lead to vastly different conclusions. Specifically, the choice of the pure time discount rate δ decides on whether immediate strong action (in the Stern Review) or a more moderate response (as in Nordhaus' writings) is the right strategy facing the climate change challenge. This contribution critically comments the use of both δ and η, the elasticity of marginal utility with respect to income, as “adjustment screws” in models of climate economics. Often, the models remain ambiguous as to whether they apply empirical or normative variables; facts and value judgments are not sufficiently distinguished. Furthermore, Discounted Utilitarianism appears to be a questionable fundament for climate change economics. From a non-utilitarian, specifically a Rawlsian point of view, it is pointless to maximize the utility an abstract, eternally-long lived phantasm “humanity” where no human individuals are distinguished. The more persuading position in climate economics is to postulate a duty to do everything in order to avoid serious evil for future generations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 72 (2011)
Issue (Month): C ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/ecolecon
Climate change economics; The Stern Review; Pure time discount rate; Elasticity of marginal utility; Discounted Utilitarianism;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Howarth, Richard B, 1998. " An Overlapping Generations Model of Climate-Economy Interactions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(3), pages 575-91, September.
- Richard B. Howarth, 1997. "Sustainability as Opportunity," Land Economics, University of Wisconsin Press, vol. 73(4), pages 569-579.
- Ulrich Hampicke, 2003. "The capacity to solve problems as a rationale for intertemporal discounting," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 6(1), pages 98-116.
- Richard B. Howarth, 2003. "Discounting and sustainability: towards reconciliation," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 6(1), pages 87-97.
- Robert Mendelsohn, 2008. "Is the Stern Review an Economic Analysis?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(1), pages 45-60, Winter.
- Heal, G., 1998. "Valuing the Future: Economic Theory and Sustainability," Papers 98-10, Columbia - Graduate School of Business.
- Dasgupta, Partha, 2005. "What Do Economists Analyze And Why: Values Or Facts?," Economics and Philosophy, Cambridge University Press, vol. 21(02), pages 221-278, October.
- Richard B. Howarth, 1995. "Sustainability under Uncertainty: A Deontological Approach," Land Economics, University of Wisconsin Press, vol. 71(4), pages 417-427.
- Anderson, Blake & M'Gonigle, Michael, 2012. "Does ecological economics have a future?," Ecological Economics, Elsevier, vol. 84(C), pages 37-48.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.