Public Policy and Climate Change

The following sections are included:

• About the Author
• Contents
• Introduction

Lecture 1 begins by setting out the central claims behind the desire to offer a PPE course.

The first claim is that the disciplines of politics, philosophy, and economics overlap in ways that make a joint study a fruitful alternative to the more common approach of specializing in one of them…

A particularly notable feature of the Internet era is the widespread belief that it is possible for untrained people to ‘do their own research’ on complex issues like global heating. Typically, this entails entering some search terms into an ‘engine’ such as Google and selecting those results that appeal to the preconceived ‘skeptical’ beliefs of the ‘researcher’. This procedure works reasonably well in a search for consumer goods, the advertising for which is the main source of Google’s revenue…

No matter where carbon-based fuels are produced and no matter where they are burned to emit greenhouse gases, they are rapidly mixed in the atmosphere and their effects are felt throughout the world. Moreover, while people and nations differ radically in the emissions they generate, everyone uses energy and nearly everyone contributes to global heating to some extent…

Lecture 4 introduces one of the crucial ideas of the course, the concept of ‘opportunity cost’, and shows how it is related to the problem of the carbon budget.

We consider both private and social opportunity costs: The private opportunity cost of anything is what you must give up to get it. The social opportunity cost of anything of value is what you and others must give up so that you can have it

Opportunity cost and not accounting costs or market prices is the central concept of cost for economists. The concept applies to all the choices we make as individuals and as a society. Ideally, market prices should coincide with social opportunity costs, but there are many reasons why they may not.…

In this lecture, the concept of social opportunity cost is used to develop the idea of ‘market failure’. In an ideal competitive equilibrium, private and social opportunity costs are equal to each other and to market prices. But, economic outcomes are rarely ideal.…

This lecture begins with the emissions equation, an arithmetic identity relating carbon emissions (C) to energy use (E), energy services (S), and aggregate output (G). The equation takes the form

To reduce emissions, it is necessary either to reduce one of the three ratios — C/E (carbon intensity of energy), E/S (inverse of energy efficiency), or S/G (energy service share of GDP) — or to reduce GDP. We discuss options for each of these in turn…

In this lecture, the point is demonstrated with three diagrams, or rather the same diagram with four different sets of labels. The first box on “Discounting, Distribution and Uncertainty” is the standard model of consumer and producer choice for with a single individual (in Economics 101, commonly referred to as ‘Robinson Crusoe’, after the fictional character marooned on an island and initially alone)…

This lecture begins by comparing hard problems, impossible problems, and wicked problems.

Some problems are simply impossible. These are problems that, given our current knowledge and technology, cannot be solved. They lack feasible solutions within the known constraints. Economic analysis enables us to characterize some problems as impossible problems. Famous examples include the Arrow Impossibility Theorem in voting theory and the Mundell–Fleming Impossible Trinity in international monetary theory…

This lecture deals with policy instruments for addressing global heating by reducing greenhouse gas emissions. The starting point of analysis is the duality of prices and quantities: Policymakers can either set a specific emission reduction target (a quantity-based approach) or establish a carbon price (a price-based approach) as the primary policy instrument…

This lecture begins with a comparison between the Paris target of constraining heating to 1.5 °C and a ‘current policy commitment’ projection of 3 degrees. The consequences of 3 degrees of heating were analyzed in a report prepared for the Australian Academy of Science by an expert panel of 14 mostly natural scientists, but including one economist (me).

The report focuses on the consequences of 3 °C of global warming for the following four areas of importance to Australia’s future:

• ecosystems,
• food production,
• cities and towns,
• health and well-being

The response to global heating involves a vast multitude of actions taken by governments, businesses, and individual households, far too many to cover in any detail. This lecture will deal mainly with what is happening at a global level, through the UN Framework Convention on Climate Change…

In the last lecture of the course, I summarize and recapitulate the central issues and offer some final reflections. I begin by restating the central point of Lecture 1, that is, the distinct perspective that a PPE course brings to the analysis of policy problems, integrating political science, ethical and epistemological issues in philosophy, and the economics of resource allocation…

The following section is included:

• Index