Will Hutton's Rio postmortem
Jun 25, 2012
Bishop Hill in Economics, Greens

Will Hutton, a stockbroker turned left-wing talking head, reviews the climate debate in the aftermath of the Rio conference. It's mostly fairly ill-informed:

The ideology driving the sceptics is most obvious in the exchanges over the impact on future generations. US Tea Party activists and their bombastic British representative, Niall Ferguson – now delivering the Reith lectures – like to terrify their audiences with how much public debt today's generation is leaving its children. Yet the same argument is not applied to the planet. At the end of his first lecture Professor Ferguson was asked if he applied the same logic on future generations to climate change: he was flummoxed, and dodged the question.

He was right to be embarrassed. Climate change is already hurting and, unchecked, will turn into a catastrophe. Economists use what is called a discount rate to compare income and welfare in the future with income and welfare today. If we forgo just a little welfare today through burning less fossil fuel, even applying a modest discount rate, we can guarantee that there will be no catastrophic loss of welfare in 2050. This is exactly the same argument that Ferguson, Osborne et al use in reverse when asking us to accept austerity today for the joy of being free of public debt in decades to come. But it is not OK to use it for climate change.

There is so much nonsense in here: the fact that the UK hasn't actually cut spending yet; the remoteness of a possibility of a catastrophic loss of welfare by 2050; the equating of spending cuts with nobbling the economy. But I'm not sure anyone is listening to the Huttons of this world any longer.

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