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Ethics, equity and the economics of climate change paper 2: economics and politics
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Ethics, equity and the economics of climate change paper 2: economics and politics

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  • Stern, Nicholas

Abstract

Both intergenerational and intratemporal equity are central to the examination of policy towards climate change. However, many discussions of intergenerational issues have been marred by serious analytical errors, particularly in applying standard approaches to discounting; the errors arise, in part, from paying insufficient attention to the magnitude of potential damages, and is part from overlooking problems with market information. Some of the philosophical concepts and principles of Paper 1 are applied to the analytics and ethics of pure-time discounting and infinite-horizon models, providing helpful insights into orderings of welfare streams and obligations towards future generations. Such principles give little support for the idea of discrimination by date of birth. Intratemporal issues are central to problematic and slow-moving international discussions and are the second focus of this paper. A way forward is to cast the policy issues and analyses in a way that keeps equity issues central and embeds them in the challenge of fostering the dynamic transition to the low-carbon economy in both developed and developing countries. This avoids the trap of seeing issues primarily in terms of burden-sharing and zero-sum games – that leads to inaction and the most inequitable outcome of all.

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  • Stern, Nicholas, 2014. "Ethics, equity and the economics of climate change paper 2: economics and politics," LSE Research Online Documents on Economics 62704, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:62704
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    Cited by:

    1. Stern, Nicholas, 2021. "A time for action on climate change and a time for change in economics," LSE Research Online Documents on Economics 112802, London School of Economics and Political Science, LSE Library.
    2. Nicholas Stern & Joseph E Stiglitz, 2023. "Climate change and growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(2), pages 277-303.
    3. Stern, Nicholas, 2018. "Public economics as if time matters: Climate change and the dynamics of policy," Journal of Public Economics, Elsevier, vol. 162(C), pages 4-17.
    4. J. Atsu Amegashie, 2016. "Public Goods, Signaling, and Norms of Conscientious Leadership," CESifo Working Paper Series 6247, CESifo.
    5. Damian J. Bridge, 2022. "The ethics of climate change: a systematic literature review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2651-2665, June.
    6. Granqvist, Harry & Grover, David, 2016. "Distributive fairness in paying for clean energy infrastructure," LSE Research Online Documents on Economics 66486, London School of Economics and Political Science, LSE Library.
    7. Zerrahn, Alexander, 2017. "Wind Power and Externalities," Ecological Economics, Elsevier, vol. 141(C), pages 245-260.
    8. Alexander Zerrahn, 2017. "Wind Power: Mitigated and Imposed External Costs and Other Indirect Economic Effects," DIW Roundup: Politik im Fokus 111, DIW Berlin, German Institute for Economic Research.
    9. Tvinnereim, Endre & Mehling, Michael, 2018. "Carbon pricing and deep decarbonisation," Energy Policy, Elsevier, vol. 121(C), pages 185-189.
    10. Jaume Masoliver & Miquel Montero & Josep Perelló, 2021. "Jump-Diffusion Models for Valuing the Future: Discounting under Extreme Situations," Mathematics, MDPI, vol. 9(14), pages 1-26, July.
    11. Stern, Nicholas, 2021. "A time for action on climate change and a time for change in economics," LSE Research Online Documents on Economics 112808, London School of Economics and Political Science, LSE Library.
    12. Julie A. Nelson, 2016. "Male Is a Gender, Too: A Review of Why Gender Matters in Economics by Mukesh Eswaran," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1362-1376, December.

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