Editorial Observer/EDUARDO PORTER


Calculating how much to spend to keep the future from boiling over.

Arresting global warming won’t come cheap.
Europe and Japan are already spending billions to meet the modest carbon emission cuts that they agreed to in Kyoto 10 years ago.
And according to a recent United Nations report, switching to cleaner energy sources would require investments of up to $20 trillion over the next two decades.
Add to that other economic costs, such as the rise in food prices attributable to the world’s embrace of renewable fuels.
This is money that might be spent to address other pressing social problems, like world hunger, lack of access to clean water in poor countries, malaria, AIDS.
Is that a good trade-off? How much should the world be willing to sacrifice today to avert the future costs of global warming? The scientists are clear that there is not a lot of time for this or any other debate.
Climate change could start causing irreparable damage in the not-too-distant future.
And there is a seemingly clearcut ethical position to guide us: people’s rights should not depend on when they were born.
Assuming our grandchildren’s welfare is just as valuable as our own provides a metric to measure the value of investments for the future: devoting X percent of the current generation’s income to forestall global warming would be a good deal if it produced a benefit amounting to more than X percent of that future generation’s income.
Such notions of intergenerational equity underpin the 2006 Stern Review on the Economics of Climate Change, a British study that marked a turning point in the debate, stressing the enormous cost of delaying preventive action.
It projected that avoiding large-scale environmental damage, starting in the second half of this century, justified starting to spend immediately 1 percent of the world’s income ? about $700 billion this year ? to cut carbon emissions.
However, farsightedness, as in saving for a rainy day, went out of fashion a long time ago.
People often sacrifice the future to the present.
We may love our children and grandchildren.
But since they can’t vote, we stiff them in the public sphere: poverty is deeper among children than the elderly, yet public spending on the elderly vastly outstrips spending on the young.
In Florida, “I’m spending my children’s inheritance” is a popular bumper sticker.
Even among very green Western Europeans, polls show that the older people get, the less they are willing to pay to reduce carbon emissions.
There are other potential incongruities.
The people of the future will very likely be richer and more productive than today’s.
So why should we be spending so much on the future’s welfare? The regressive notion that 1 percent of income is worth the same for the poorer present than for the richer future is the kind of thinking that underpins the misguided argument for a flat tax.
Moreover, it probably would be cheaper to cut carbon emissions using the future’s more advanced technology.
Skeptics have used these arguments to make a case against aggressive efforts to address global warming.
A group of respected, mainly American economists signed the so-called Copenhagen Consensus, warming, such as the Kyoto Protocol, had “costs that were likely to exceed the benefits.
- It was better to spend money on some of the world’s other pressing problems.
Some criticisms are sensible.
Perhaps the return on investments to avoid future climate change should clear a higher hurdle than the Stern report’s roughly one-for-one payoff as a share of income to compensate for its regressive features.
William Cline, an economist at the Peterson in Washington, suggested 1-to-1.5.
Yet while this might justify somewhat less investment today to address the costs of warming tomorrow, it would still warrant aggressive action.
The best case for bold action now is that it provides insurance against the chance of an unfathomably grim future of largescale hunger.
All of that might come to pass if the world chooses to do nothing.
Averting that kind of future is worth quite a lot of investment today.