CPR's Ackerman on the Economics of Climate Change

Matthew Freeman

Dec. 10, 2008

CPR Member Scholar Frank Ackerman has an interesting piece in the November/December issue of Dollars and Sense magazine. He points out that the opponents of genuine action to prevent climate change have shifted their principal line of argument in an important way. Rather than arguing as they did through much of the 1990s and the first part of this decade that climate change isn’t real, or that it’s overstated, or that it’s a natural phenomenon about which we should not be concerned, or that we're all a bunch of extremist environmental wackos for worrying, they’re now arguing that doing much of anything about climate change will do violence to the economy.


Ackerman observes that opponents are making what is essentially a cost-benefit argument against meaningful action, suggesting that, at most, we should take baby steps so as to minimize economic impact.


Ackerman argues that the conventional cost-benefit analysis just isn’t up to the task of assessing the value of action to prevent further climate change. He writes:

What will it take to build a better economics of climate change, one that is consistent with the urgency expressed by the latest climate science? The issues that matter are big, non-technical principles, capable of being expressed in bumper-sticker format. Here are the four bumper stickers for a better climate economics: Our grandchildren’s lives are important; We need to buy insurance for the planet; Climate damages are too valuable to have prices; and Some costs are better than others.

Ackerman has written for CPR on cost-benefit analysis, including several projects with CPR Member Scholar Lisa Heinzerling. He’s also recently published a book on the failings of cost-benefit analysis in the context of toxics, Poisoned for Pennies: The Economics of Toxics and Precaution.”  He and Heinzerling had previously published Priceless: On Knowing the Price of Everything and the Value of Nothing.


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