The Precautionary Principle and Climate Change
I recently posted on an article authored by Paul Krugman, a highly regarded economist, on his analysis of how to address climate change. I was a bit critical of his choice to spend a considerable amount of time discussing science rather than economics, but I have a much more fundamental problem with the piece: He gave up on economics.
In the last 2500 words of his article, Mr. Krugman decides he needs to make the case for immediate action on climate change so he sets up the classic straw man of “what if we don’t act?” He declares that disaster is certain but that the magnitude of the disaster is uncertain. Based on this uncertainty, Mr. Krugman says:
You might think that this uncertainty weakens the case of action, but it actually strengthens it. As Harvard’s Martin Weitzman has argued in several influential papers, if there is a significant chance of utter catastrophe, that chance -- rather than what is most likely to happen -- should dominate cost-benefit calculations. And utter catastrophe does look like a realistic possibility, even if it is not the most likely outcome policy.
Weitzman argues -- and I agree -- that this risk of catastrophe, rather than the details of cost-benefit calculations, makes the most powerful case for strong climate change.
Spoken like a true politician. That pesky, economics-based cost-benefit analysis needs to go.
Where have you heard this type of argument before? This is the same argument made by Dick Cheney to justify pursuing Al Qaeda. It is known as the precautionary principle, or the one-percent doctrine based on Mr. Cheney’s statement:
If there’s a 1% chance that Pakistan’s scientists are helping Al Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response . . . .
In other words, if there’s a small likelihood, even a one percent chance, of a catastrophic event (such as global warming), then doing a cost-benefit analysis that might result in no immediate response would apparently be . . . well . . . “criminally irresponsible” according to Mr. Krugman.
There are any number of possible responses to that statement, but being a family-friendly blog I will simply say: You have got to be kidding me. We’re going to quit looking at other options based on the 1% possibility of catastrophe? We’re going to ignore the opportunity costs of that decision? We’re going to overlook the downside risk inherent in such a strategy? And we’re going to do this as a matter of policy for the entire world? Really?
Allow me to give a few reasons for why such a strategy might not be insanity, but is a very close relative.
First, the precautionary principle is the ideal argument for people who have run out of arguments. It says: "Ok, ok you’re right almost all of the time, but I might be right a small percentage of the time, so we’re going with my idea." While I admit that there will be a certain number of politicians that will like this argument (which group will, of course, change depending on who controls Congress), it isn’t a sound basis upon which to promulgate national policy.
Second, where do you draw the line? What is sacrosanct about a 1 in 100 chance? What about 1 in 1,000,000 or 1 in 10? There has to be a line somewhere. Should we spend years arguing about where it is, or will it be determined, once again, by who has the biggest stick?
Finally, as every trial attorney can tell you, there is an expert for everything. In other words, there will always be someone who can dream up some example of a small chance of a catastrophe. It really isn’t hard to do. (There’s a great Dan Akroyd SNL skit where he justifies selling a “Bag-O-Razor-Blades” to children because they might have a small chance of getting hurt by chocking on their toy bear anyway, so it’s OK for him to sell razor blades. Well, maybe this would actually be the non-precautionary principle. The precautionary principle would be to prohibit the selling of the bear).
Using the precautionary principle for environmental policy (as EPA seems to be proposing), or war policy or any other public policy, is wrong. It circumvents honest debate and ignores costs. Mr. Krugman, as brilliant an economist as you are, stick to your area of expertise. Don’t throw out cost-benefit analysis just because it doesn’t fit your political beliefs at the moment (though it, too, has problems). You can still get where you want to go (to encourage immediate action on climate change), but do it using the tools of the discipline you know. Keep economics above the fray, don’t drag it down to the political level.
RELATED POST: Paul Krugman and the Non-Economics of Climate Change
