WARNING:
JavaScript is turned OFF. None of the links on this concept map will
work until it is reactivated.
If you need help turning JavaScript On, click here.
This Concept Map, created with IHMC CmapTools, has information related to: GDP-effects-and-strong-action, this does not take into account the non-linear effects of "‘socially contin- gent’ responses – the possibility that climate change will not only increase the immediate costs of climate change, but also affect investment decisions, labour supply and pro- ductivity, and even social and political stability" (Stern 2006e, 151) objects "In the coming decades, damages are predicted to rise relative to output. As that occurs, it becomes efficient to shift investments toward more intensive emissions reductions", there is a middle way between not acting and strong action: the "climate policy ramp" see the calculation of "the optimal climate change policy" according to the DICE-2007 model: 697-701, click on the small, bent arrow at the bottom right of this text box to get back to the Stern Review's main argumentation start here if not acting implies that "the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever," and if "the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year" if we start to take strong action now, then "the benefits of strong and early action far outweigh the economic costs of not acting", this does not take into account the non-linear effects of "extreme weather events – notably floods, droughts, and storms. Experience of weather disasters in many parts of the world demon- strates that the more extreme events can have lasting economic effects, especially when they fall on an economy weakened by previous weather disasters or other shocks, or if they fall on an economy that finds it difficult to adjust quickly" (Stern 2006e, 151) objects "In the coming decades, damages are predicted to rise relative to output. As that occurs, it becomes efficient to shift investments toward more intensive emissions reductions", "The difficulty is that some of the negative effects of climate change will actually lead to increases in expenditure, which increase economic output. Examples are increasing expenditure on air conditioning and flood defences. But it is correct to subtract these from GDP in the ‘no climate change’ scenario, because such expenditures are a cost of climate change. As a result, the measure of the monetary cost of climate change that we derive is really a measure of income loss, rather than output loss as conventionally measured by GDP." (Stern 2006e, 145) defeats effects on GDP do not necessarily tell us something about costs and benefits; "disasters can also contribute to GDP increases. For example, hurricanes can lead to booms in the construction sector. This says more about the failings of GDP as a measure of overall welfare and well-being than the impacts of such events." (707), effects on GDP do not necessarily tell us something about costs and benefits; "disasters can also contribute to GDP increases. For example, hurricanes can lead to booms in the construction sector. This says more about the failings of GDP as a measure of overall welfare and well-being than the impacts of such events." (707) defeats (Spash 2007) if not acting implies that "the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever," and if "the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year" if we start to take strong action now, then "the benefits of strong and early action far outweigh the economic costs of not acting", a widely shared consensus in the "study of intertemporal efficiency in climate-change policy": "One of the major findings in the economics of climate change has been that [this is] efficient or “optimal” economic policies.... We might call this the climate- policy ramp, in which policies to slow global warming in- creasingly tighten or ramp up over time." "All economic studies find a case for imposing immediate re- straints on greenhouse gas emissions, but the difficult questions are how much and how fast." (687) supports we should target "modest rates of emissions reductions in the near term, followed by sharp reductions in the medium and long term", if the highest-return investments today are primarily in tangible, technological, and human capital, and if it is more efficient to shift investments toward more intensive emissions reductions ony in the coming decades, then we should target the "climate policy ramp" therefore (ArgScheme: modus ponens AU: Nordhaus, 687) we should target "modest rates of emissions reductions in the near term, followed by sharp reductions in the medium and long term", "In the coming decades, damages are predicted to rise relative to output. As that occurs, it becomes efficient to shift investments toward more intensive emissions reductions" therefore (ArgScheme: modus ponens AU: Nordhaus, 687) we should target "modest rates of emissions reductions in the near term, followed by sharp reductions in the medium and long term", The Debate about the Stern-Review and the Economics of Climate Change visualized according to the rules and conventions of Logical Argument Mapping (LAM), "Global per capita consumption today is around $10,000. According to the Review’s assumptions, this will grow at 1.3 percent per year, to around $130,000 in two centuries. Using these numbers, how persuasive is the ethical stance that we have a duty to reduce current consumption by a substantial amount to improve the welfare of the rich future generations?" (694) defeats (Nordhaus 2007) if not acting implies that "the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever," and if "the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year" if we start to take strong action now, then "the benefits of strong and early action far outweigh the economic costs of not acting", "Consider undertaking the Review’s emissions- control strategy and using fiscal policies to keep consumption unchanged for fifty years—that is the “Review-plusdeficit” strategy. It is certain that (using returns on capital that match estimated market returns) the Review’s strategy would leave future generations with less consumption than the optimum-plus-deficit. Indeed, by my calculations, the Review’s strategy would leave the future absolutely worse off—it would be Pareto-deteriorating. The reason why the Review’s approach is inefficient is that it invests too much in low-yield abatement strategies too early. After fifty years, conventional capital is much reduced, while “climate capital” is only slightly increased. The efficient strategy has more investment in conventional capital at the beginning and can use those additional resources to invest heavily in climate capital later on." (695) compare A "Fiscal-Policy Experiment": "Begin with the path of consumption that corresponds to the current state of affairs—one in which there are essentially no policies to reduce greenhouse gas emissions. Call this path the “baseline” trajectory. Then, adopt a set of abatement strategies that correspond to the optimum in the Ramsey growth model. However, along with this optimal abatement strategy, we undertake fiscal tax and transfer policies to maintain the baseline consumption levels for the present (say for fifty years). The optimum might have slightly lower consumption in the early years, so the fiscal-policy experiment would involve both abatement and fiscal deficits and debt accumulation for some time, followed by fiscal surpluses and debt repayment later. Call this the “optimal-plusdeficit” strategy. In essence, this alternative keeps consumption the same for the present but rearranges societal investments away from conventional capital (structures, equipment, education, and the like) to investments in abatement of greenhouse gas emissions (in “climate capital,” so to speak)." (695), A "Fiscal-Policy Experiment": "Begin with the path of consumption that corresponds to the current state of affairs—one in which there are essentially no policies to reduce greenhouse gas emissions. Call this path the “baseline” trajectory. Then, adopt a set of abatement strategies that correspond to the optimum in the Ramsey growth model. However, along with this optimal abatement strategy, we undertake fiscal tax and transfer policies to maintain the baseline consumption levels for the present (say for fifty years). The optimum might have slightly lower consumption in the early years, so the fiscal-policy experiment would involve both abatement and fiscal deficits and debt accumulation for some time, followed by fiscal surpluses and debt repayment later. Call this the “optimal-plusdeficit” strategy. In essence, this alternative keeps consumption the same for the present but rearranges societal investments away from conventional capital (structures, equipment, education, and the like) to investments in abatement of greenhouse gas emissions (in “climate capital,” so to speak)." (695) supports if the highest-return investments today are primarily in tangible, technological, and human capital, and if it is more efficient to shift investments toward more intensive emissions reductions ony in the coming decades, then we should target the "climate policy ramp", "In a world where capital is productive, the highest-return investments today are primarily in tangible, technological, and human capital, including research and development on low-carbon technologies" therefore (ArgScheme: modus ponens AU: Nordhaus, 687) we should target "modest rates of emissions reductions in the near term, followed by sharp reductions in the medium and long term", there is a middle way between not acting and strong action: the "climate policy ramp" defeats (Nordhaus 2007) if not acting implies that "the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever," and if "the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year" if we start to take strong action now, then "the benefits of strong and early action far outweigh the economic costs of not acting", "Consider undertaking the Review’s emissions- control strategy and using fiscal policies to keep consumption unchanged for fifty years—that is the “Review-plusdeficit” strategy. It is certain that (using returns on capital that match estimated market returns) the Review’s strategy would leave future generations with less consumption than the optimum-plus-deficit. Indeed, by my calculations, the Review’s strategy would leave the future absolutely worse off—it would be Pareto-deteriorating. The reason why the Review’s approach is inefficient is that it invests too much in low-yield abatement strategies too early. After fifty years, conventional capital is much reduced, while “climate capital” is only slightly increased. The efficient strategy has more investment in conventional capital at the beginning and can use those additional resources to invest heavily in climate capital later on." (695) defeats (Nordhaus 2007) if not acting implies that "the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever," and if "the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year" if we start to take strong action now, then "the benefits of strong and early action far outweigh the economic costs of not acting"