An excellent, and often forgotten, point in favour of limiting our response to climate change is the opportunity cost of reducing carbon emissions. Opponents of a policy response often point to the monetary cost to the developed world. Proponents reply that you can’t put a monetary cost on saving the planet. As economists we should always try to think about things in real rather than nominal terms, so what is the real opportunity cost of climate change policy? It could be investment in the developing world, reducing the number of people living in poverty or controlling the African AIDS epidemic.
Are the costs of limited climate change enough to persuade you to sacrifice the lives of so many who will die if the funds that could be used to save them are spent combating global warming? That’s a very tough decision to make, and one that it’s easy to overlook when you listen only to the rhetoric of some environmentalists.
However, the environmentalists may have a point: it’s easy for me to say that the opportunity cost of climate change could be the lives of many, but is it really? That depends on what the governments who enact climate change policy actually would have spent that money on if they didn’t enact the policy. If you think that they would have used the money for worthy causes (and what’s worthy is part of your normative judgment) then you may have a difficult decision over whether to support your government’s response to climate change. If you think your government would have frittered the money away (again, I’m intentionally using very subjective terms) then the decision is easily made.