With Economics In Disarray, It's Time To Rethink Climate Change

Someone said that a human doesn't know what it means to live until they have planted trees under whose shade they will never sit. Surely that kind of wisdom has more to teach us than economics ever has or ever will.
|

We heard this week that the economics profession is in crisis. The inability to foresee the 2008 financial crisis and mis-judgments about the impact of the Brexit vote mean economics has lost the trust of politicians and the public.

If indeed economics as a science and way of seeing and understanding the world has had its day, then we quickly need to work out what that means for our ideas about dealing with climate change. Because make no mistake, economics has dominated and defined our understanding of climate change in exactly the same way economics has dominated and defined every other area of our lives.

That's the reason why the Stern Review on Climate Change (written by Nicholas Stern, an economist) received such wide covered upon its publication in 2006, becoming 'the reference work for politicians and green campaigners'. Here at last was someone telling us what to do, and telling us in the only language that mattered - economics. None of that hippy 'going to live in caves' nonsense. No doom and gloom. Instead the Review 'considers the economic costs of the impacts of climate change, and the costs and benefits of action to reduce the emissions of greenhouse gases (GHGs) that cause it'. The ultimate objective of climate policy was to ensure climate change did not damage economic growth.

Whilst Nicholas Stern was able to admit in 2013 his calculations were wrong and overly optimistic about the risks posed by climate change, he did not go so far as to admit economics was just not up to the job of securing a decent future for humanity. But that is what we are hearing this week, as if we didn't know it already. And that is a very real danger, given the enormity of the threat posed by climate change.

Economic thinking has led to decision-makers viewing the earth as an accountant's ledger, which can best be managed by a form of double-entry bookkeeping. The world is made up of sinks and carbon reservoirs, and carbon moves from one to the other, as smoothly as numbers move from one side of the ledger to the other. But the economics language doesn't stop there. We have carbon budgets, carbon accounting, inventories, targets, carbon markets, and carbon pricing.

If it was working, that would all be good. We would be justified in thinking about climate change as an economics problem. But it is not working. Atmospheric concentrations of greenhouse gases and global temperatures are at record highs. The targets which define, from an economics perspective, the optimum response to climate change, are a bust. It is time for a different approach, an approach to climate which is not grounded in the world view and expertise of a small well educated group of specialists. We are kind of getting the message now on that, following the Brexit and Trump votes.

What is needed instead is a way of engaging with climate change which is built from the bottom-up and speaks to the values, experience, hopes and concerns of everyday life. It is about showing the connections between a future which benefits the many, not just the few, with the possibility of a good quality of life that can be shared by all without ruining the quality of life for subsequent generations.

Someone said that a human doesn't know what it means to live until they have planted trees under whose shade they will never sit. Surely that kind of wisdom has more to teach us than economics ever has or ever will.