Okay, why not. One more thread on carbon pricing because I think this below is an important point worth expanding on. Economists and climate advocates often *do* think of carbon taxes very differently. /1
The original economic rationale for a carbon tax was that polluters should be required to pay for and internalize the damage they cause by polluting. So: Let's figure out the economic cost of global warming and tax fossil-fuel users accordingly—ie, the "social cost of carbon." /2
Importantly, this view does *not* require getting emissions down to zero. If people are willing to pay the tax and keep burning fossil fuels, fine! That just means the benefits exceed the costs. We're at an economically optimal level of emissions and warming. /3
So what's the problem with this way of looking at things? One critique is that it requires faith that policymakers can get a decent handle on what the social cost of carbon actually *is* — on how much damage global warming will cause — and set the tax at a proper level. /4
But there's good reason to doubt anyone can calculate the "correct" social cost of carbon. As Marty Weitzman argues here, economic models basically become guesswork at high levels of warming. We have very little clue what 4°C or 6°C will cost. academic.oup.com/reep/article-a… /5
There's also a non-trivial chance that 4°C or 6°C of warming would destroy human civilization as we know it. Maybe it's only a 5% chance. But do you want to get in a plane with a 5% chance of crashing? How about a planet? /6
(Plus there are a bunch of other problems with figuring out the "right" social cost of carbon. How do you value the destruction of ecosystems? What about discount rates? What about potential climate impacts we don't even know about yet? Etc.) /7
This is essentially an argument that it's inappropriate to think of global warming merely as a giant cost-benefit problem. Instead, we should think of it more as an insurance problem: We want to insure against truly catastrophic outcomes. /8
If so, then we probably want to keep total global warming below a certain level. (Many people see 2°C or 1.5°C as a safe level.) It's not enough to say, "Let's just impose a social cost of carbon on polluters and if people want to pay it, that's still economically efficient." /9
Most climate hawks see the problem in roughly this way, even if it's not always articulated like that. For them, a carbon tax is a *tool* for reducing emissions to a certain level, usually to zero. The social cost of carbon is not an end in itself. /10
One drawback with the insurance view is that we're still in fuzzy territory, economically. It's hard to say exactly how much insurance we need, or when mitigation costs become unacceptably high. (Most people agree that staying below 1°C seems too costly, but after that...?) /11
Economics and science can help shed light on these questions, but they're probably never going to give us THE answer on how much warming is optimal. It's a huge judgment call, under a cloud of massive uncertainty, with the fate of civilization possibly at stake. Fun times... /bye
