Map of life expectancy at birth from Global Education Project.

Monday, September 28, 2009

Oh yeah, climate change

I haven't written much about the very important problem of anthropogenic global warming, essentially because I haven't felt that I had very much to add to the subject. I'm not particularly an expert on any central aspect of the issue. But then again, neither is Paul Krugman. His column today suggests implicitly that we probably all should do what we can to get the polity to pay more attention, so I'll chip in what I can.

Krugman points to two main reasons why political action to address AGW, indeed even widespread acknowledgment, is lacking. One is that powerful vested interests are threatened by the possibility of meaningful action, and the other is that the prevailing "free market" ideology cannot encompass reality. But there is of course a third reason, and that is our relationship to the future. This is a question I do happen to know something about, since it's central to public health and health policy. It's actually something that economists think about a lot too, in their own way, so I'm surprised Professor K doesn't mention it as well.

I discussed this earlier in the context of QALYs: people will say today that they would exchange some amount of life span to avoid some form of sickness, disability or pain; but that does not mean that once the ill health happens to us, we necessarily value our lives less. If you think about it, people actually make a similar bargain when they smoke tobacco or eat at McDonald's: they are exchanging not only life expectancy but future good health to avoid having to forgo something they find pleasurable or convenient today. It's just that the wager includes a negatively framed and immediate component -- giving something up today -- as opposed to a positively framed component in the intermediate future -- avoiding something unpleasant. Either way, we are valuing the present and near term more than we do the more distant future. It's the same reason why people live on the slopes of active volcanoes or on Galveston Island. (Well, come to think of it, hardly anybody lives on Galveston any more.)

Economists model this as the discount rate. The future just doesn't matter as much as the present because we expect to have more in the future; our investments will grow so we can buy our way out of trouble, is the basic idea. They actually treat this as a sort of law of nature and believe it is evidence of their "rationality." Is it? Certainly not, especially if what we perceive as growing wealth is actually just extraction and consumption of finite resources, such as the earth's atmosphere.

The point is, we blithely bargain away the future, but when it gets here, the indulgences of the past generally turn out to be no consolation. Alas, I fear the bargain has already been made. It's happening, ready or not.


Bix said...

By chance, I had read Krugman's column yesterday too.

Both your post and his column made me recall something I read a while back about chimpanzees.

Chimps were offered grapes, humans were offered chocolate:
"The choice was between one unit of goodies immediately and three after two minutes.
Chimpanzees were nearly four times more likely to wait for the big reward than humans were."

Not saying this is related to what either of you were discussing. I don't know. They were testing "delayed gratification" or patience. It made me wonder if we don't see protecting resources as gratifying.

robin andrea said...

Why do we let economists shape the discussion? Haven't they made a mess of it all already? I was once the grad student adviser in the ecomonics department of a university. Faculty and students spoke gibberish and had no sense of the vagaries of the human condition. Quantifying everything into measurable and predictable experiences and outcomes (including hope and expectation)is absurd.

We're about to move into fire prone mountains of California. Leaving the clashing tectonic plates for a possible tinderbox. What would an economist make of that?

It only takes leadership to create the climate for a real and sensible discussion about climate change.

Cervantes said...

Well Robin, you know you face a risk of wildfire, you know if it happens you'll likely have warning and escape with your mortal flesh but perhaps not your possessions, and you are willing to take that chance for whatever rewards you find from living where you will be living. You are quite right -- if that's rational for you, it's rational enough, because it's your choice.

However, as you know, it's a profound difference in kind when people do not assume risks voluntarily, or are misled about risks. I agree with you that the way economists think about these problems is largely ridiculous, but I'm inclined to think that we do need a common language to talk about them, and we don't really have that.

Yeah Bix, I don't know about humans vs. chimps, but as you probably know there have been a lot of experiments on the varying proclivity of children to defer gratification. We are very heterogeneous in this respect. It might be interesting to try to relate those differences to people's responses to environmental risk and other kinds of hazards, I'm not aware that such research has been done.