The Economist: Wrong economic models of climate impact better than no models — But how is assuming harm better than not?

The Economist opines:

The question is whether it is nevertheless useful to have some guide to the future cost of climate change, however inexact. Mr Pindyck’s answer is radical: forget the models. He calls them “close to useless as tools for policy analysis…their use suggests a level of knowledge and precision that is simply illusory.”

Lord Stern is a little more hopeful. He points out that scientists are producing a new generation of climate models and urges economists to do the same. But to work, he says they require sweeping changes to incorporate the idea that global warming can damage capital stock, productivity and growth. They would also, he says, need low or even negative discount rates, to reflect the possibility that future generations will be worse off than the current one. That is controversial: the use of a low discount rate in the “Stern review”, the 2007 study that used some of the models he now complains of, was heavily criticised. But as John Maynard Keynes is supposed to have said, it is better to be roughly right than precisely wrong—or not to make any estimate at all.

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7 thoughts on “The Economist: Wrong economic models of climate impact better than no models — But how is assuming harm better than not?”

  1. The Economist lost the plot about five years ago. I don’t why I still subscribe to it, to be honest. It has taken a strangely interventionist, big government, anti-growth tack for too long now. Not only is it an AGW cheerleader, it now also thinks (among other things) that agricultural subsidies in the US and EU are not much of a problem for anyone else, and that QE will magically turn into fairy dust or some other nonsense.

  2. The Economist Democrat bias, which is quaint in British publication, was obvious when they endorsed Obama in 2008, although they’d been following the party line before that. It’s sad to see what was a great unbiased publication decline into a party hack.

  3. One of the strongest forms of bias, and the most damaging, is unwillingness to honestly admit you just don’t know.

  4. I was just teaching my Excel students that producing the wrong answer is much worse than having an error message. Same here. A faulty economic model is very damaging, vis communism, DemBamaCare, quantitative easing…

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