Martin Weitzman’s paper on the economics of catastrophic climate change is rather like Moby Dick – something we all nod to knowing references while we’re secretly saying to ourselves, “WTF? Did you actually understand this?” I actually went so far as to enlist an environmental economist of my acquaintence (being a journalist has its advantages). He used a white board. It was fun.
The nut of the argument is that climate change involves uncertainty about low probability but potentially very high consequence events, making ordinary cost-benefit analysis difficult.
So I was happy to see in Daniel Hall’s post today on the subject that I am not alone:
Nobel prize winner Tom Schelling, one of the discussants at the event, noted that he read the paper 5 or 6 times without ever feeling that he was sure what it was saying.
The problem is that Weitzman doesn’t really tell us what we ought to do. But it nevertheless is a very significant framework for thinking about the issue.