Advertisement

Ethics in Climate Economics: Balance or Bias?

  • Martin Kowarsch
Chapter
Part of the Boston Studies in the Philosophy and History of Science book series (BSPS, volume 323)

Abstract

This chapter aims to analyse the normative-ethical assumptions implied in the structure and scenarios of integrated assessment models (IAMs), as well as the IAM-based studies used in the recent assessments by the Intergovernmental Panel on Climate Change (IPCC). This will be done according to the framework developed in Sect.  7.3 which claims transparency and balance. I focus particularly on aspects related to objective functions in IAMs, i.e., on welfare economic issues. Section 8.1 discusses the predominant views of the relationship between welfare economics, ethics and values. Since these views have a considerable impact on the welfare economic assumptions of IAMs, one should be aware of them. Then, some fundamental assumptions of mainstream economics underlying welfare economics – i.e., the assumed rationality of agents in markets – are examined (Sect. 8.2). Based on that, the more specific analysis of IAMs regarding welfare issues can be undertaken (Sect. 8.3). Moreover, Sect. 8.4 briefly discusses other ethically interesting aspects of IAMs that serve as additional examples of the value-laden IAM economics of climate change. It is concluded that at least some disputable ethical value judgements in IAM-based studies are still relatively opaque and one-sided – which makes life more difficult for the authors of assessment reports (Sect. 8.5).

Keywords

Gross Domestic Product Climate Policy Social Welfare Function Individual Utility Neoclassical Theory 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Ackerman, Frank, Stephen J. DeCanio, Richard B. Howarth, and Kristen Sheeran. 2009. Limitations of integrated assessment models of climate change. Climatic Change 95(3–4): 297–315.CrossRefGoogle Scholar
  2. Anderson, Elizabeth. 1990. The ethical limitations of the market. Economics and Philosophy 6(2): 179–205.CrossRefGoogle Scholar
  3. Anderson, Elizabeth. 1993. Value in ethics and economics. Cambridge, MA: Harvard University Press.Google Scholar
  4. Arrow, Kenneth J. 1970. Social choice and individual values, 2nd ed. New Haven: Yale University Press.Google Scholar
  5. Arrow, Kenneth J., Amartya K. Sen, and Kotaro Suzumura (eds.). 2002. Handbook of social choice and welfare volume 1. Amsterdam: Elsevier.Google Scholar
  6. Bauer, Nico, Lavinia Baumstark, Markus Haller, Marian Leimbach, Gunnar Luderer, Michael Lueken, and Robert Pietzcker, et al. 2011. REMIND: The equations. http://www.pik-potsdam.de/research/sustainable-solutions/models/remind/remind-equations.pdf. Accessed 13 Mar 2015.
  7. Beckerman, Wilfred. 2011. Economics as applied ethics. Value judgements in welfare economics. Houndmills/Basingstoke: Palgrave Macmillan.Google Scholar
  8. Bentham, Jeremy. 1907. An introduction to the principles of morals and legislation. Oxford: Clarendon Press.Google Scholar
  9. Bergson, Abram, published as Abram Burk. 1938. A reformulation of certain aspects of welfare economics. Quarterly Journal of Economics 52: 310–334.Google Scholar
  10. Betz, Gregor. 2009. Underdetermination, model-ensembles and surprises: On the epistemology of scenario-analysis in climatology. Journal for General Philosophy of Science 40(1): 3–21.CrossRefGoogle Scholar
  11. Binmore, Ken. 1974. Playing fair: Game theory and the social contract. Cambridge, MA: MIT Press.Google Scholar
  12. Binmore, Ken. 2005. Natural justice. Oxford: Oxford University Press.CrossRefGoogle Scholar
  13. Bowles, Samuel, and Sandra Polania-Reyes. 2012. Economic incentives and social preferences: Substitutes or complements? Journal of Economic Literature 50(2): 368–425.CrossRefGoogle Scholar
  14. Brodbeck, Karl-Heinz. 2011. Die Entwicklung der Ökonomik zur normativen Wissenschaft. In Handbuch Wirtschaftsethik, ed. Michael S. Aßländer, 43–52. Stuttgart: J. B. Metzler.Google Scholar
  15. Broome, John. 1978. Trying to value a life. Journal of Public Economics 9: 91–100.CrossRefGoogle Scholar
  16. Broome, John. 1992. Counting the cost of global warming. Cambridge: The White Horse Press.Google Scholar
  17. Broome, John. 1999. Ethics out of economics. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  18. Brümmerhoff, Dieter. 2007. Volkswirtschaftliche Gesamtrechnungen, 8th ed. München: Oldenbourg.Google Scholar
  19. Caldwell, Bruce J. 1994. Beyond positivism. Economic methodology in the twentieth century, rev. ed., London: Routledge.Google Scholar
  20. Caney, Simon. 2009. Climate change and the future: Discounting for time, wealth, and risk. Journal of Social Philosophy 40(2): 163–186.CrossRefGoogle Scholar
  21. Chang, Ruth (ed.). 1997. Incommensurability, incomparability, and practical reason. Cambridge, MA: Harvard University Press.Google Scholar
  22. Dasgupta, Partha. 2007. Commentary: The Stern review’s economics of climate change. National Institute Economic Review 199: 4–7.Google Scholar
  23. Davis, John B. 2009. Identity. In Handbook of economics and ethics, ed. Jan Peil and Irene Staveren, 246–251. Cheltenham: Edward Elgar.Google Scholar
  24. DeCanio, Stephen J. 2003. Economic models of climate change. A critique. New York: Palgrave Macmillan.CrossRefGoogle Scholar
  25. DeMartino, George. 2009. Globalization. In Handbook of economics and ethics, ed. Jan Peil and Irene Staveren, 185–192. Cheltenham: Edward Elgar.Google Scholar
  26. Dewey, John. 1927. The public and its problems. New York: Henry Hold & Co.Google Scholar
  27. Dewey, John. 1988. Theory of valuation. In John Dewey. The later works, 1925–1953, volume 13: 1938–1939, ed. Jo A. Boydston, 189–251. Carbondale/Edwardsville: Southern Illinois University Press.Google Scholar
  28. Dietz, Simon, Cameron J. Hepburn, and Nicolas Stern. 2009. Economics, ethics and climate change. In Arguments for a better world: Essays in honour of Amartya Sen. Volume 2: Society, institutions and development, ed. Kaushik Basu and Ravi Kanbur, 365–386. Oxford: Oxford University Press.Google Scholar
  29. Dupré, John. 2007. Fact and value. In Value-free science? Ideals and illusions, ed. Harold Kincaid, John Dupré, and Alison Wylie, 27–41. Oxford: Oxford University Press.CrossRefGoogle Scholar
  30. Dutt, Amitava K., and Charles K. Wilber. 2010. Economics and ethics. An introduction. New York: Palgrave Macmillan.Google Scholar
  31. Edenhofer, Ottmar, Nico Bauer, and Elmar Kriegler. 2005. The impact of technological change on climate protection and welfare: Insights from the model MIND. Ecological Economics 54: 277–292.CrossRefGoogle Scholar
  32. Edenhofer, Ottmar, Brigitte Knopf, Terry Barker, Lavinia Baumstark, Elie Bellevrat, Bertrand Chateau, and Patrick Criqui, et al. 2010. The economics of low stabilization: Model comparison of mitigation strategies and costs. The Energy Journal 31, Special Issue 1: The Economics of Low Stabilization: 11–48.Google Scholar
  33. Edenhofer, Ottmar, Johannes Wallacher, Hermann Lotze-Campen, Michael Reder, Brigitte Knopf, and Johannes Müller (eds.). 2012. Climate change, justice and sustainability: Linking climate and development policy. Dordrecht: Springer.Google Scholar
  34. Endres, Alfred, and Jörn Martiensen. 2007. Mikroökonomik. Stuttgart: Kohlhammer.Google Scholar
  35. Fullbrook, Edward. 2009. Epistemology. In Handbook of economics and ethics, ed. Jan Peil and Irene Staveren, 123–129. Cheltenham: Edward Elgar.Google Scholar
  36. Füssel, Hans-Martin. 2007. Methodological and empirical flaws in the design and application of simple climate-economy models. Climatic Change 81: 161–185.CrossRefGoogle Scholar
  37. Füssel, Hans-Martin, and Michael Mastrandrea. 2009. Integrated assessment of climate change. In Climate change science and policy, ed. Stephan H. Schneider, Armin Rosencranz, and Michael Mastrandrea, 150–161. Washington, DC: Island Press.Google Scholar
  38. Gardiner, Stephen. 2006. Protecting future generations: Intergenerational back-passing, theoretical ineptitude and a brief for a global core precautionary principle. In Handbook of intergenerational justice, ed. Joerg G. Tremmel, 148–169. Cheltenham: Edward Elgar.Google Scholar
  39. Giersch, Thorsten. 1993. Bergson-Wohlfahrtsfunktion und normative Ökonomie. Finanzwissenschaftliche Schriften 54. Frankfurt a.M.: Peter Lang.Google Scholar
  40. Hands, D. Wade. 2001. Reflection without rules. Economic methodology and contemporary science theory. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  41. Hausman, Daniel M., and Michael S. McPherson. 2006. Economic analysis, moral philosophy, and public policy, 2nd ed. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  42. Heal, Geoffrey. 2009. Climate economics: A meta-review and some suggestions for future research. Review of Environmental Economics and Policy 3(1): 4–21.CrossRefGoogle Scholar
  43. Hodgson, Bernard. 2001. Economics as moral science. Berlin: Springer.CrossRefGoogle Scholar
  44. Hof, Andries F., Michel G.J. den Elzen, and Detlef P. van Vuuren. 2008. Analysing the costs and benefits of climate policy: Value judgements and scientific uncertainties. Global Enviromental Change 18(3): 412–424.CrossRefGoogle Scholar
  45. Hope, Chris. 2005. Integrated assessment models. In Climate-change policy, ed. Dieter Helm, 77–98. Oxford: Oxford University Press.Google Scholar
  46. IPCC. Eds. Bert Metz, Ogunlade Davidson, Peter Bosch, Rutu Dave, and Leo Meyer. 2007. Climate change 2007: Mitigation of climate change. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge: Cambridge University Press.Google Scholar
  47. Kirchgässner, Gebhard. 2000. Homo Oeconomicus. Das ökonomische Modell individuellen Verhaltens und seine Anwendung in den Wirtschafts- und Sozialwissenschaften, 2nd ed. Tübingen: Mohr Siebeck.Google Scholar
  48. Kleinewefers, Henner. 2008. Einführung in die Wohlfahrtsökonomie. Theorie; Anwendung; Kritik. Stuttgart: Kohlhammer.Google Scholar
  49. Kowarsch, Martin, and Andreas Gösele. 2012. Triangle of justice. In Climate change, justice and sustainability: Linking climate and development policy, ed. Ottmar Edenhofer, Johannes Wallacher, Hermann Lotze-Campen, Michael Reder, Brigitte Knopf, and Johannes Müller, 73–90. Dordrecht: Springer.CrossRefGoogle Scholar
  50. Kymlicka, Will. 2002. Contemporary political philosophy: An introduction, 2nd ed. Oxford: Oxford University Press.Google Scholar
  51. Little, Ian M.D. 1957. A critique of welfare economics, 2nd ed. Oxford: Clarendon Press.Google Scholar
  52. Little, Ian M.D. 2002. Ethics, economics, and politics. Principles of public policy. Oxford: Oxford University Press.CrossRefGoogle Scholar
  53. Machlup, Fritz. 1969. Positive and normative economics. In Economic means social ends, ed. Robert Heilbronner, 99–129. Englewood Cliffs: Prentice-Hall.Google Scholar
  54. Meyer, Lukas. 2010. Intergenerational justice. In The Stanford encyclopedia of philosophy: Spring 2010 edition, ed. Edward Zalta. http://plato.stanford.edu/archives/spr2010/entries/justice-intergenerational/. Accessed 13 Mar 2015.
  55. Millner, Antony. 2013. On welfare frameworks and catastrophic climate risks. Journal of Environmental Economics and Management 65(2): 310–325.CrossRefGoogle Scholar
  56. Montuschi, Eleonora. 2014. Scientific objectivity. In Philosophy of social science: A new introduction, ed. Nancy Cartwright and Eleonora Montuschi, 123–144. Oxford: Oxford University Press.Google Scholar
  57. Müller, Johannes, and Johannes Wallacher. 2005. Entwicklungsgerechte Weltwirtschaft. Stuttgart: Kohlhammer.Google Scholar
  58. Nelson, Julie A. 2008. Economists, value judgments, and climate change. Ecological Economics 65(3): 441–447.CrossRefGoogle Scholar
  59. Ng, Yew-Kwang. 1972. Value judgments and economists’ role in policy recommendation. Economic Journal 82(327): 1014–1018.CrossRefGoogle Scholar
  60. Nooteboom, Bart. 2009. Trust. In Handbook of economics and ethics, ed. Jan Peil and Irene Staveren, 547–554. Cheltenham: Edward Elgar.Google Scholar
  61. Nordhaus, William D. 2007. A review of the Stern review on the economics of climate change. Journal of Economic Literature 45(3): 686–702.CrossRefGoogle Scholar
  62. Nordhaus, William D. 2008. A question of balance: Weighing the options on global warming policies. New Haven: Yale University Press.Google Scholar
  63. Nordhaus, William D., and James Tobin. 1973. Is growth obsolete? In Measurement of economic & social performance, ed. Milton Moss, 509–564. New York: National Bureau of Economic Research.Google Scholar
  64. O’Neill, John. 2009. Market. In Handbook of economics and ethics, ed. Jan Peil and Irene Staveren, 317–324. Cheltenham: Edward Elgar.Google Scholar
  65. OECD. 2011. Society at a glance 2011: OECD social indicators. http://dx.doi.org/10.1787/soc_glance-2011-en. Accessed 13 Mar 2015.
  66. Offer, Avner. 2006. The challenge of affluence. Oxford: Oxford University Press.Google Scholar
  67. Ostrom, Elinor, James Walker, and Roy Gardner. 1992. Convenants with and without a sword: Self-governance is possible. American Political Science Review 86: 404–417.CrossRefGoogle Scholar
  68. Parfit, Derek. 1984. Reasons and persons. Oxford: Oxford University Press.Google Scholar
  69. Peil, Jan, and Irene Staveren (eds.). 2009. Handbook of economics and ethics. Cheltenham: Edward Elgar.Google Scholar
  70. Pigou, Arthur C. 2002. The economics of welfare. New York: Cosimo.Google Scholar
  71. Putnam, Hilary, and Vivian Walsh (eds.). 2012. The end of value-free economics. London/New York: Routledge.Google Scholar
  72. Rawls, John. 1971. A theory of justice. Cambridge, MA: Harvard University Press.Google Scholar
  73. Robbins, Lionel. 1945. An essay on the nature and significance of economic science, 2nd ed. London: Macmillan & Co.Google Scholar
  74. Rodriguez-Sickert, Carlos. 2009. Homo economicus. In Handbook of economics and ethics, ed. Jan Peil and Irene Staveren, 223–229. Cheltenham: Edward Elgar.Google Scholar
  75. Samuelson, Paul A. 1947. The foundations of economic analysis. Cambridge, MA: Harvard University Press.Google Scholar
  76. Samuelson, Paul A. 1950. The evaluation of real national income. Oxford Economic Papers 2: 1–29.Google Scholar
  77. Sanstad, Alan H., and Lorna A. Greening. 1998. Economic models for climate policy analysis: A critical discussion. Environmental Modeling and Assessment 3: 3–18.CrossRefGoogle Scholar
  78. Sayer, Andrew. 2011. Why things matter to people. Social sciences, values and ethical life. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  79. Schneider, Stephen H. 1997. Integrated assessment modeling of global climate change: Transparent rational tool for policy making or opaque screen hiding value-laden assumptions? Environmental Modeling and Assessment 2(4): 229–249.CrossRefGoogle Scholar
  80. Schneider, Stephen H. 2005. Integrated assessment modeling of global climate change: Much has been learned – Still a long and bumpy road ahead. The Integrated Assessment Journal 5(1): 41–75.Google Scholar
  81. Sen, Amartya K. 1970. Collective choice and social welfare. San Francisco: Holden-Day, Inc.Google Scholar
  82. Sen, Amartya K. 1981. Poverty and famines. An essay on entitlements and depriviation. Oxford: Oxford University Press.Google Scholar
  83. Sen, Amartya K. 1982. Choice, welfare and measurement. Oxford: Blackwell Publishers.Google Scholar
  84. Sen, Amartya K. 1986. Social choice theory. In Handbook of mathematical economics: Volume III, ed. Kenneth J. Arrow and Michael D. Intriligator, 1073–1181. Amsterdam: North-Holland.CrossRefGoogle Scholar
  85. Sen, Amartya K. 1988. On ethics and economics. Malden: Blackwell.Google Scholar
  86. Sen, Amartya K. 1999. Development as freedom. New York: Oxford University Press.Google Scholar
  87. Siegmeier, Jan, Linus Mattauch, and Ottmar Edenhofer. 2015. Climate policy enhances efficiency: A macroeconomic portfolio effect. CESifo Working Paper 5161. http://www.mcc-berlin.net/uploads/media/cesifo1_working_paper_5161.pdf. Accessed 31 Mar 2015.
  88. Smith, Adam. 1759. The theory of moral sentiments. http://www.econlib.org/library/Smith/smMSCover.html. Accessed 13 Mar 2015.
  89. Stanton, Elizabeth A. 2011. Negishi welfare weights in integrated assessment models: The mathematics of global inequality. Climatic Change 107: 417–432.CrossRefGoogle Scholar
  90. Stern, Nicolas. 2007. The economics of climate change. The Stern review. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  91. Streeten, Paul. 1950. Economics and value judgments. The Quarterly Journal of Economics 64(4): 583–595.CrossRefGoogle Scholar
  92. Tavoni, Massimo, and Richard S.J. Tol. 2010. Counting only the hits? The risk of underestimating the costs of stringent climate policy. A letter. Climatic Change 100(3–4): 769–778.CrossRefGoogle Scholar
  93. Touffut, Jean-Philippe (ed.). 2009. Changing climate, changing economy. Cheltenham: Edward Elgar.Google Scholar
  94. van der Sluijs, Jeroen P. 2002. A way out of the credibility crisis of models used in integrated environmental assessment. Futures 34: 133–146.CrossRefGoogle Scholar
  95. von Stechow, Christoph, Jan C. Minx, Keywan Riahi, Jessica Jewell, David L. McCollum, Max W. Callaghan, Christoph Bertram, et al. 2016. 2 °C and SDGs: United they stand, divided they fall? Environmental Research Letters 11: 034022.CrossRefGoogle Scholar
  96. Wallacher, Johannes. 2011. Mehrwert Glück. Munich: Herbig.Google Scholar
  97. Weitzman, Martin L. 2007. A review of the Stern review on the economics of climate change. Journal of Economic Literature 45(3): 703–724.CrossRefGoogle Scholar
  98. Weitzman, Martin L. 2009. On modelling and interpreting the economics of catastrophic climate change. The Review of Economics and Statistics 91(1): 1–19.CrossRefGoogle Scholar
  99. Weston, Samuel. 1994. Toward a better understanding of the positive/normative distinction in economics. Economics and Philosophy 10(1): 1–17.CrossRefGoogle Scholar
  100. Weyant, John P. 2009. A perspective on integrated assessment. An editorial comment. Climatic Change 95: 317–323.CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  • Martin Kowarsch
    • 1
  1. 1.Mercator Research Institute on Global Commons and Climate Change (MCC)BerlinGermany

Personalised recommendations