29 Jul 2008

Climate Change for Non-Economists

On Wednesday Thursday, I'll be discussing the economics of climate change on a panel at a summer school for mathematics PhD students. I am planning to cover the following topics wrt the social science side of climate change:
  1. Climate change can be addressed by mitigation (trying to affect CC) and adaption (dealing with it). In both cases, physical science and engineering will be effective if the "right" institutions prevail.
  2. Institutions (the rules of the game) can turn good policies into bad outcomes and vice-versa, so its important to get them right if, e.g., we want cap and trade to work.
  3. Prices matter; non-prices matter even more wrt climate change.
  4. Humans are marvelously creative -- if they can repair a plane in mid-flight, they can deal with climate change.
  5. Humans are also unpredictable; just when you think you've got them "captured" in your model, they can change directions. This makes "social dynamic" models particularly unstable.
Please comment on and/or add to this list. I am hoping to expand it into a series of posts ("economics for lawyers and engineers").

I will also try to learn something from the mathematicians, lawyers and engineers :)

Bottom Line: Everyone should know some economics, but conveying such knowledge can be deceptively hard.