Project Syndicate Autumn 2021: Sustainability

IN EARLY AUGUST, THE Intergovernmental Panel on Climate Change (IPCC) issued a new global assessment – the first in almost a decade – warning that humanity has already warmed the planet by 1.1° Celsius and is now on track to cross the 1.5°C threshold by 2040. According to the secretary-general of the United Nations, António Guterres, the report should be seen as a “code red for humanity.” The ideal of limiting global warming to 1.5°C above pre-industrial levels, the key motivating factor behind the 2015 Paris climate agreement, has almost slipped from our grasp. The challenge now is not only to prevent even more catastrophic warming beyond that 1.5°C increase, but also to adapt to the new conditions that have already been locked in. It is difficult to overstate the potential impact…

THE SCIENTIFIC PERSPECTIVE IS BLEAK. In May, the World Meteorological Organization warned that there is a 40% chance that the annual average global temperature will exceed 1.5° Celsius above pre-industrial levels, at least temporarily, in the next five years – and the odds continue to rise. This could trigger potentially disastrous tipping points. The Intergovernmental Panel on Climate Change (IPCC) has recently published its latest major climate-change report in the lead-up to the 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow. Each successive IPCC report has been starker than the last, and the latest did not break the pattern. After all, the world is not on track to meet the Paris climate agreement’s goal of limiting the global temperature rise to 2°C above pre-industrial levels – let alone…

CONFRONTED WITH SUCH MASSIVE long-term risks, many of our long-held assumptions will need to be revised, and the economics discipline is no exception. If we are going to avoid misguided policy pathways such as those that would abandon economic growth completely (even though billions of people around the world are still in poverty), we need to adapt mainstream economics to new climate realities. True, the discipline has long recognized the importance of environmental issues. William D. Nordhaus, the recipient of the 2018 Nobel prize in economic sciences, introduced the costs of greenhouse-gas (GHG) emissions into standard economic-growth models in 1991, and this work has shaped how economists and many policymakers think about climate change. But existing approaches in economics still do not provide the right framework for managing the problems that will…

THE BIOLOGIST PAUL R. EHRLICH GAVE exceptionally imprudent advice in his 1968 book, The Population Bomb, in which he suggested that humanity was heading for acute resource scarcities and mass starvation. What happened instead is that world income kept rising, as it had been doing for two centuries, and as it shows every sign of continuing to do. Pessimism has been a poor predictor. As the British historian Thomas Macaulay presciently asked in 1830, “On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?” It was a good question then, and it is an even better one now. Environmental fundamentalists who insist that “this time is different” are defying both logic and the historical evidence. In terms of real…

BUT BENEATH THE SHINY SURFACE lay the discernible cracks of a system in chronic disrepair. The snow above the town was thinner than at any time since the Forum’s first meeting in the early 1970s. In Australia, the fires that had burned through the long “black summer,” were raging still. It would turn out to be the warmest January on record. Climate change was not the self-satisfied Davos crowd’s only concern. There was a growing recognition that the global economy had run into new and uncomfortable difficulties. These were variously attributed to a debt overhang, trade wars, or political populism in the hands of capricious leaders. Nobody could decide who was most at fault. But the damage was plain to see. Capitalism had left too many people behind. Its rewards had been…

THAT’S CUTE, I THOUGHT, BUT IS IT TRUE? Actually, it is completely false. Our output measures do not count pollution. They include goods like cars and services but not carbon monoxide (CO) pumped into the air. The point is worth considering: measures of national output do not adequately correct for pollution or other spillover effects of the economy. That is why a serious effort has been made to develop accounts that properly reflect these factors. “Green national accounting,” however, has turned out to be extremely difficult terrain. Most discussions of national output refer to gross domestic product: the value of the goods and services produced by the economy, less the value of the goods and services used up in producing them. GDP thus includes consumption goods like food, investment goods like new…