The History and Politics of the Anthropocene: Eric Posner and David Weisbach

“Public Policy over Massive Time Scales” 


David and I are law professors focused on public policy. How to make the world better through it. My first reaction was that the idea was not useful at all. But this is a topic we can discuss. There is a related issue of massive time scales. 

I’m not going to say the word Anthropocene again. But you’ll see why what we say might be relevant. 

Question: when the government implements a project, how far into the future should it calculate the costs and benefits? 
Amortization rate of benefits: economists assume this
Examples: bridge (ca 30 years)
Reform of judiciary (<100 font="" years="">
Radioactive waste (lasts 10 000 to 1 million years)
Power plants (climate change--indefinite time scale)

future benefits discounted by economists; build bridge, or you can set aside money in bank let it accumulate interest then 10 years from now people can use that to benefit themselves
3% growth >> .97 discount factor

Discounting: typical project has current cost and future benefits
Calculate social value by subtracting costs from discounted benefits
if you have a project that has effects 100 years out, you have to take into account that you might get a better outcome by simply investing money

Uncertainty: increases further into the future
suppose we are considering a project with payoff of $1bn in future, and are deciding how much today to spend
If you assume discount is very low, then the $1bn is worth a few hundred million; but high discount rate >> far lower payoff

social cost of carbon (SCC)
government uses a 300 year estimate
CAFE standards (fuel emissions in vehicles), fluorescent and incandescent lamp standards; small electronic motor standards; at least eleven others
every ton of carbon has a social cost to be factored in
EPA will issue major regs that include social cost of carbon

Government estimated range of uncertainty by varying discount rates; how much temperatures will go up for a given scenario; how big damages will be for any given temperature increase. Relatively tight range of estimates. 

Liz Moyer geophysicist, draft paper

how does uncertainty propagate over time? exponentially because there is an exponential function
same thing can happen in any economics model of climate change
base case: climate change reduces usable output but growth continues. Errors have no long term effects. 
Idea that not that much will change. Growing corn today, same as tomorrow. 

Alternative A: small fraction of damages from climate change reduces growth rate. Errors here >> exponential errors over time. 

Government model:
Base scenario: from 30 to 27 times richer in 300 years. Why would we sacrifice today to help people who will be that much richer no matter what? 

Alternative A: take a percentage of damages and apply to growth rate. At just 1% the damage is doubled. At 5% the damage is such that the economy starts collapsing by 2300. Then 10% >> subsistence economy by 2300. 
Anywhere from 25 times richer to dark ages! 

SCC with no change to growth is $16. At 50% it is $100 000. At 100% it is $130 million! 

>> the timescale for thinking about policy must be very project specific
how important is discounting?
how does today’s uncertainty affect estimates

efforts to calculate the impact are largely worthless (Posner)
efforts are highly sensitive to initial assumptions (Weisbach)

The concept of the Anthropocene is not helpful for making policy choices
Deep uncertainty but also because climate change problem is one of energy transition
source of our wealth is fossil fuels >> energy transition in about 100 years; that is an engineering problem

Q&A

Q: The term “uncertainty” needs to analyzed. There is something like exponential growth and there is also something like a tipping point. Because things haven’t panned out. How insert that into an equation? 

A: We didn’t even include tipping points. You can add a damage function that increases as temperature goes up.

A: Marvin Weitzman (Harvard). There can be tipping on both sides. You can have huge growth. Or war. 

Q: Then doesn’t Anthropocene become irrelevant? 

Q: I agree with the Posner logic but the Weisbach conclusion. The uncertainty is at least as great. US only 50% likely to exist 300 years from now! It’s absurd. But the conclusion is energy transition, and we need a reason to do it. The reason can’t be rational calculation of long term benefits of long-term policies to >> conclusion of Weisbach. I don’t know that we have it yet. They are moral rather than rational calculation; playing with fire is a bad idea. 

A: We do think we are using a moral argument--to enhance human well-being. Idea of sustainable development. But I don’t think that works conceptually. There seems to be no alternative to this way of thinking. [me: which is agrilogistical]

Q; Are we thinking of a no-growth economy? Creating junk we don’t need. 

A: A low growth economy would be horrible. You have 7 billion people living subsistence lives right now. Many are living on $1 a day. You would be condemning them to subsistence. To say we should stop growing condemns them to horrible lives. 

Q: But stuff we don’t need? 

A: One problem is distribution. Given how much the economy can produce now, if distributed fairly, that would be sufficient. Junk for one person is valuable for another. 

Q: oh come on. How many people need to eat steak every day? 

A: You can’t just tell people to stop consuming. The solution is to try to put in place policies that will redistribute wealth within the constraints we are willing to tolerate. 

A: If we stop growing you still have to find a way to replace the energy. If you don’t you shrink back to subsistence. 
[but ironically, though you wish to avoid it, “the bad level” is built into the default well-being utilitarianism used in this argument! loop!]

Q: You guys are both lawyers. The question of whether it’s human made climate change is a factor? For insurance purposes we have acts of God etc. 

A: That’s not correct. You can get insurance for natural disasters unrelated to human activity. It just depends what the probability of the outcome is. People cause climate change >> you can give incentives to reduce. But even if people had nothing to do with it, you would still want to take that into account for public policy purposes. 

Q: DoD predictions of future based on half life of radioactive materials. Does radioactive waste provide a model for thinking far into the future? 

A: benefit of nuclear: less greenhouse gases. cost: accidents, waste. Future warnings such as target that gets super hot in the sunlight. 

Q: The idea of tipping point. One can make guesses as to when alternative fuels will come online. Hansen and so on: what they can’t model for is exactly when the tipping point comes. Too many equations to solve. Uncertainty you can’t make into risk. Does policy have to be blind or neutral to that? 

A: not at all. This is why we want to start energy transition now. 

Q: But the problem is that we need 6 or 7 decades to get from lab to online energy. While India and China have all the policies for more food and car production. 

A: I don’t know what to say other than we need to start right away. Conservation can start right away. No fossil fuels by 2100. How do you get there at lowest cost? Precisely that we don’t know when the point will be is why to be urgent. We are trying to estimate the costs of energy transition at different moments. You have to replace $5 trillion worth of energy stuff. As fast as possible. That’s just the USA!

A: I take your question to mean that ignoring the tipping point will estimate SCC too low. Maybe it should be $100 or whatever. The question is what should the number be? I think you have to ignore it...