Environmental Decision Making: Thinking alternatively in the face of inaction

In order to have a better world for us to live in and our descendants to enjoy, we need proactive environmental policymaking that can stop global environmental catastrophes. Although some renowned economists and climate skeptics talk in favor of “business-as-usual” strategies that undermine climate science, a more hands on approach is needed. Frank Ackerman’s Can We Afford the Future? The Economics of a Warming World analyzes this issue, and lays out the argument for a proactive approach in lucid style.

Ackerman strongly criticizes the stance taken by conventional economists and climate skeptics. He notes the need to “identify mistaken assumptions” on environmental decision making and offers an “alternative understanding of climate economics.” Despite being an economist, Ackerman looks ahead of his discipline and takes a skeptical look at approaches like Cost-benefit analysis, Market equilibrium, Free Market, Laissez-faire policies which has developed on a utopian ideal rather than real world. In addition, he criticizes some renowned economists, for their arbitrary statements in favor of “business-as-usual” strategies, such as William Nordhaus, Sheila Olmstead, Robert Stavins, Robert Haln, Paul Joskow, Richard Schmalensee and Milton Friedman. He also criticizes Bjorn Lomborg, Director of the Copenhagen Consensus Center, and a writer against active climate policies. According to Ackerman, Lomborg’s limitations are “questions of accuracy, bias, and authority; cost-benefit analysis of climate change versus other priorities; and understanding of economics.”

In terms of climate policy making, Ackerman notes that ethical and political judgments are also vital in complementing economic modeling. He offers four guiding principles on climate economics for the future: “Your grandchildren’s lives are important”; “We need to buy insurance for the planet”; “Climate damages are too valuable to have prices”; “Some costs are better that others”. Ackerman also criticizes the long process of developing better frameworks at the global level. Rather than wasting more time on negotiations and criticism, Ackerman proposes, we can start with one existing policy proposal.

This approach urges us to consider the costs associated with climate policies in a holistic manner, rather than only the present cost of the climate policy. We should think differently: like the way we think about giving high premium to the insurance company with a high interest rate or in case of early start to a destination to avoid delay and other uncertainties on the road or in case of investing in the financial market.

Ackerman’s style is thought provoking, and although he does not offer any revolutionary insight into the issue of climate change and society, his argument is forceful and easy to understand. He scores on the point that climate change is not value neutral and we ultimately have to pay for it in ways that are poorly understood by our economists. Although this informative book is to some extent US-centric, it will be enlightening for general readers as well as policy makers, policy advocates and climates skeptics. This book will also be an interesting read to non-specialists like students and people who are curious or interested in debates on climate change.