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Henderson and Cochrane on Climate Policy

Summary:
Climate change is often misunderstood as a package deal: If global warming is "real," both sides of the debate seem to assume, the climate lobby's policy agenda follows inexorably. It does not. Climate policy advocates need to do a much better job of quantitatively analyzing economic costs and the actual, rather than symbolic, benefits of their policies. Skeptics would also do well to focus more attention on economic and policy analysis. To arrive at a wise policy response, we first need to consider how much economic damage climate change will do. Current models struggle to come up with economic costs consummate [sic] with apocalyptic political rhetoric. Typical costs are well below 10% of gross domestic

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Climate change is often misunderstood as a package deal: If global warming is "real," both sides of the debate seem to assume, the climate lobby's policy agenda follows inexorably.

It does not. Climate policy advocates need to do a much better job of quantitatively analyzing economic costs and the actual, rather than symbolic, benefits of their policies. Skeptics would also do well to focus more attention on economic and policy analysis.

To arrive at a wise policy response, we first need to consider how much economic damage climate change will do. Current models struggle to come up with economic costs consummate [sic] with apocalyptic political rhetoric. Typical costs are well below 10% of gross domestic product in the year 2100 and beyond.


These are the opening paragraphs of David R. Henderson and John H. Cochrane, "Climate Change Isn't the End of the World," Wall Street Journal, July 31, 2017. By the way, "consummate" should be "commensurate." I don't know how I missed that.

The op/ed, unfortunately, is gated.



David Henderson

David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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