The Cost of Saving the Planet Extended

JAISAL NOOR: Welcome to The Real News Network.
I’m Jaisal Noor in Baltimore. And welcome to our continuing discussion with James Boyce. He is the director of the environment program
at the PERI institute. So, Professor Boyce, we’re talking about the economics of global
climate change; we’re talking about cost-benefit analysis, some of the problems with it. I
wanted to ask you: is cost-benefit analysis democratic? That is, does cost-benefit analysis
treat everyone equally? JAMES K. BOYCE: Well, the short answer to
that, Jaisal, is no, it doesn’t. As I mentioned, in addition to the problem of putting dollars
and cents values on things that many would regard as priceless, there are also problems
with the methodologies that are used to ascribe those monetary values to things like clean
air, clean water, or the future of the planet’s climate. And in the weighing up costs and benefits
to different individuals, it’s not the case that cost-benefit analysis typically treats
everyone individually. The damage that is done to one person isn’t necessarily treated
the same as the damage done to others, one of the main reasons being that what’s added
up is not effects on different individuals, but rather dollar amounts are added up. So
instead of treating people equally, it treats dollars equally, and the more dollars a person
has, the bigger their weight in the cost-benefit decision-making process. It’s kind of like what happens in markets,
actually. You know, if we ask, how much purchasing power do you bring to the market, that is
based on how much money you’ve got, and some people have more purchasing power than others.
Well, in the similar fashion in the shadow markets of cost-benefit analysis, some people,
because they have more dollars than others, have more weight than others in the decisions
that are reached. So that’s one of the troubling things about cost-benefit analysis. Put bluntly, a dollar is assumed to be worth
the same whether it’s a dollar in my pocket, in your pocket, in the pocket of Bill Gates,
or in the pocket of someone who is living right at the margin of survival and in danger
of starvation. They’re all dollars, and no differentiation is made in terms of who gets
what. NOOR: And finally, how does cost-benefit analysis
handle the question of environmental quality for future generations? BOYCE: Well, just as cost-benefit analysis
doesn’t treat every individual who’s alive today equally (it treats our dollars equally),
it also doesn’t treat the lives of people today equal to those of our children or our
grandchildren or their children after them. Instead what cost-benefit analysis uses is
a technique called discounting. Discounting is used to convert future values, future dollar
and cents amounts into what are called present values. It’s basically just running the opposite
way from an interest rate, with which many of your viewers will be more familiar. If
I put $100 in the bank and it pays 5 percent interest at the end of ten years, 15 years,
whatever, I’ll get back more than $100. Well, discounting is doing the same thing in reverse.
It’s saying if there is a cost to future generations equivalent to, let’s say, $1 million, how
much is that worth today in terms of present dollars? And the answer is: it’s less than
$1 million because it’s been discounted away. It turns out that when we’re talking about
environmental problems that have long-lasting effects–and many forms of pollution, including
global warming pollution, certainly fall within that category–the choice of the discount
rate makes a really big difference, just like the choice between getting an interest rate
of half a percent versus 5 percent makes a big difference. So, as you mentioned in our first segment,
the U.S. government’s new estimates of the so-called social cost of carbon vary dramatically.
And one of the reasons for those variations is that they look at what happens with different
discount rates. If they use a relatively high one of 5 percent, they get numbers as low
as $11 per ton of carbon. That is to say, it’s only efficient to spend up to $11 to
reduce a ton of carbon emissions; beyond that, it would be inefficient to reduce them any
further. If instead they use a discount rate of 2.5 percent, which is still not zero, then
suddenly, just from that change alone, the social cost of carbon goes up to $52. So it’d
be worth spending four or five times as much to prevent climate change if we use 2.5 percent
as the discount rate. Now, even 2.5 percent is a little bit debatable
in terms of what we ought to be using here. I mean, there’s a real difference between
how individuals think about the passage of time and how we ought to think about that
as a society. Right? As an individual it may well be true that $100 today is worth a lot
[incompr.] than $100 in 20 years, because who knows if I’ll be here in 20 years, etc.
But when we’re thinking about society, we’re talking about people who haven’t even been
born yet. We’re talking about future generations who aren’t here to vote for themselves. And so does it really make sense to say, well,
$100 is worth a lot more to me than it would be to my children or to my grandchildren or
to their children? I don’t think so. You know. At 2.5 percent, which is the low-end discount
rate used in the U.S. government’s estimates of the cost of carbon, $1 million in damages
300 years from now would be worth about $600 today. So it would say, well, it’s efficient
for us to spend up to $600 to prevent imposing a $1 million cost on those future generations.
Think about that. And here we’re not talking about inflation. These are inflation-adjusted
dollars. So we’re talking about a $1 million cost in today’s dollars. Now, is it really reasonable to say that,
oh, well, we shouldn’t worry about that ’cause it’s–you know, they’re future generations
and we should discount their well-being? I think there are really profound ethical questions
on the table here when we’re thinking about how to use economic analysis to think about
problems like global climate change. And while I think a good case can be made for using
the cost-effective means to reduce global warming, I don’t think a very strong case
can be made for using economic analysis to decide whether or not we ought to do it or
how much we ought to do it. I think we have a moral obligation. We ought to honor that
obligation to future generations and figure out how to make it work, rather than asking
if it’s really worth it to us to honor that commitment. NOOR: James Boyce, thank you so much for joining
us. BOYCE: Thank you, Jaisal. Nice to be with
you, as always. NOOR: Thank you for joining us at The Real
News Network.

30 thoughts on “The Cost of Saving the Planet Extended

  1. Caring about the future, is not only caring for humans by the way.AND humans are supposed to evolve! someday! anytime now!And one way of speeding up evolution is threatening the whole species or ecosystem with drastic change, which in turn affects all species and enviroments. '

  2. Humans can't even save themselves.''Save Earth''? they can keep themselves alive a little longer and have some sublime, beautiful lives, but they cannot even save themselves by themselves. Other powers at at work then simply them, or animals.

  3. Koch backed astroturfers at work on any climate change video posted on youtube… and the fools who buy into the big oil backed propaganda. The science is clear to anyone who understands basic chemistry, you don't need to take anyone's word for it. We know what carbon dioxide does. It's like arguing that drink driving accidents are a hoax.

  4. the idea that CARBON as POLUTANT … can you say ORWELL ? with the corperate driven real pollution against all life that goes on daily unchecked ? and yet they only yell against the ONE that is a basic building block FOR LIFE to occur….peace and freedom 2013

  5. co2 like methane acts as a true greenhouse gas: heat stays trapped & this is inducing floods, droughts & rapid wind-pattern changes we otherwise never would see. We can actually see from infrared satellites it is worse where industry releases the most CO2 & methane. We could capture it and USE IT rather than just release it all.
    Too much CO2 ends life. ENDS IT. Not helps it. CO2 is not "plant food" it will kill us all unless kept to a healthy BALANCE which it is NOT now.

  6. or maybe you can sit in a box with only CO2 and see how long you live and then see if you're right that carbon isn't a pollutant.
    Benzene is also a pollutant & very explosive – and is carbon.

  7. climate change CAN'T Be controlled by the sun. None of the planets closer to the sun, farther from the sun, or even the MOON are experiencing what we are. It's the oceans, mountains & atmosphere which are controlling the climate. The moon is right next to us. No excess or decrease of solar activity is hitting the moon. JUST THE EARTH. Man made climate change is proven purely by math & measurements, no ONE voice matters, only the math & measurements.

  8. Absolutely without question global warming will kill us within 200 years and appears already to be irreversible.
    Fukushima since 2011 is the #1 world-killer. If those fuel rods all fall together a nuclear fire will burn for 10's of thousands of years & poison the entire planet. Within 20 years the Northern Hemisphere will be DEAD OF ALL LIFE, even little fungal spores.
    ONE bacterium can live inside a reactor: I suppose it will be the new overlord species.

  9. Deinococcus radiodurans
    your new overlords post-Fukushima:
    science . nasa . gov/newhome/headlines/ast14dec99_1 . htm
    onlinelibrary . wiley . com/doi/10.1002/j.2326-1951.1998.tb03393.x/pdf
    microbeworld . org/interesting-facts/how-do-they-do-that/162-survive-radiation

  10. It's funny how the deniers are so unsceptical of those they are getting their ideas from. Many climate 'sceptic' scientists being trotted are the same rent-a-science hacks hired by the tobacco industry to tell us that tobacco doesnt cause cancer and so on.

  11. "the idea that CARBON as POLUTANT … can you say ORWELL ?"

    Of course you can call it a pollutant in the same way that apples are poisonous if you eat too many. There are many chemicals that our bodies need, but in very small doses, but if you read out their names you will see them as poisons e.g. sodium chloride a.k.a. table salt.

    Carbon dioxide is a pollutant when it is a contributor to dangerous climatic changes.

  12. for 11,000 years the amount of CO2 in the atmosphere was between 250 and 300 ppm. during the years it was closer to 300 the ice melted and raised the sea level 25 meters (75 feet). This has been known for 30 years, it is fact and no scientist deny it. we are currently at 380 ppm and climbing.

  13. Why is there such a media blackout over the real dangers of Fukushima in the Northern Hemisphere and all the drama over C02? Seems like it has a more to do with profits than an actual immenant danger.

  14. 5:48
    "At 2.5% which is the low-end discount rate used in the US government's estimates of the cost of carbon, a million [inflation-adjusted] dollars of damages 300 years from now would be worth about $600 today."

  15. Absurd and ridiculous. It's all a scam to bilk the public and control future economies. Plants thrive on CO2, and it isn't causing global warming. The warming is caused by meteorological forces beyond our control, and not by air pollution. The real problem is the never-ending pollution of the Earth's land, water table, and fish reserves. If they really want to do something constructive, then they should back the NAWAPA Project at larouchepac(.)com.

  16. The distinction between the individual and society with regard to the discount rate pertaining to future values is related to Garret Hardin's "tragedy of the commons".

  17. That 'whats in it for me' meme is CLASSIC psychopathic behaviour. Economics model all people as psychopaths! Why the fuck do we tollerate so much sick behaviour? Because its calmly and bizzarely rationalistically delivered? What is wrong with people.Millionaire lifestyles are TOTALLY unnecessary and make people morally worse people.There is a belief that nothing else alive has rights.Education should have a large science and psychopath understanding element. This is becoming vitally important…

  18. We shouldn't be trying to lower CO2 emissions. It's totally unnecessary and will lower productivity. Why do you think its added to greenhouses? More is better. Anyone who thinks CO2 needs to be lower needs to go back to school and get a real education.

  19. It's a very, very minor contributor. You need to go look at some charts that show in fact that while CO2 levels have continued to increase, temps have flattened. There cannot be "global" warming – it's just not the way the planet functions. Only half of it is warming at any given time. Do some research as to how much is allowed on our submarines.

  20. If it's not plant food, why do owners of greenhouses add more CO2 to them? Go back to school and take a class in plant biology.

  21. Actually that is incorrect. The global temperature anomalies of the last 150 years track almost perfectly the growth in human population which is almost perfectly correlated to human CO2 output. The only real variance in correlation is due to the 11 year solar cycle, which is easily eliminated to show the actual strong correlation. You can get the data for these from Wolfram-Alpha (scientific calculation site) for free. I can send you a link if you would like.

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