The appallingly bad neoclassical economics of climate change

| July 16, 2021 | Leave a Comment

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Media Type: Article - Foundational

Date of Publication: September 1

Year of Publication: 2020

Publication City: Abingdon, UK

Publisher: Taylor & Francis Group

Author(s): Steve Keen

Journal: Globalizations

Volume: DOI: 10.1080/14747731.2020.1807856

Categories: ,

Abstract

Forecasts by economists of the economic damage from climate change have been notably sanguine, compared to warnings by scientists about damage to the biosphere. This is because economists made their own predictions of damages, using three spurious methods: assuming that about 90% of GDP will be unaffected by climate change, because it happens indoors; using the relationship between temperature and GDP today as a proxy for the impact of global warming over time; and using surveys that diluted extreme warnings from scientists with optimistic expectations from economists.

Nordhaus has misrepresented the scientific literature to justify the using of a smooth function to describe the damage to GDP from climate change. Correcting for these errors makes it feasible that the economic damages from climate change are at least an order of magnitude worse than forecast by economists, and may be so great as to threaten the survival of human civilization.

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