An Ecological Economic Perspective of the Climate Change Crisis
The aim of this chapter is to show that many factors affecting climate change-related costs have been seriously overlooked and that these oversights have grossly distorted cost assessments and recommended emissions trajectories. In order to support this claim, the chapter begins by explaining how total damage costs and mitigation costs are conventionally estimated. An ecological economic perspective is then adopted to outline some of the major cost factors routinely ignored by climate change analysts and to explain why these oversights have led to a gross underestimation of both categories of costs. Given the findings revealed, a number of crucial policy-related questions arise, which are answered from both a growth-as-usual and steady-state economic context—the latter of importance given the need for all nations to eventually make the transition to a quality-improving steady-state economy. It is argued that, in the former context, the price of greenhouse gas emissions is likely to continue rising into the foreseeable future. Conversely, in a steady-state context, the price of greenhouse gas emissions is likely to increase at a diminishing rate before declining during the latter stages of the 21st century. What becomes clear is that ecological economists and mainstream economists not only differ in terms of what constitutes an optimal emissions trajectory, but also in terms of how the optimum should be ascertained and achieved. For ecological economists, an optimal emissions trajectory is one where the atmospheric concentration of greenhouse gases is stabilised at a safe level and where the necessary emissions reductions are achieved in the most cost-effective manner. It is the ecological economic approach, not the mainstream approach, which must be adopted to resolve the climate change crisis.