2 thoughts on “6-2 Emilie Rosenlund Soysal. Economic survival and climate change.”
Colm Connaughton
Thank you Emilie. I have to admit, the idea that one can ignore existential risk by an appropriate choice of discount factor never felt very plausible to me!
I was wondering whether you can account for timescales in this kind of analysis? Both abatement policies and climate feedbacks have lags associated with them. I could imagine these lags interacting in complicated ways to produce transient dynamics that are high risk.
Oh wow! This is so refreshing, Emilie!
Early on in the talk my heart sank when you went through the standard way of treating the problem, but then you did exactly the right thing, and very in the spirit of ergodicity economics: just throw out all this ill-constrained nonsense about utility and expectations and discounting and identify the actual physical problem.
In this case, the problem is potential ruin and the associated ergodicity breaking. You consider long-term survival as the desideratum and simply maximize its probability. People will argue about details, e.g. whether the long-time limit which produces the survival probabilities really is the regime to consider, or whether ruin has an appreciable probability at all. But I think your big contribution here is to totally throw over board the old arbitrariness, start with a completely fresh look at the problem, and identify a way of thinking about it that is undeniably relevant.
Very very nice! There have been a number of people who’ve just been “screaming into the void,” as one climate scientist put it to me, about the terribly misleading work in classical economics about this problem. But I haven’t seen such a nice constructive argument. I look forward to discussing this further.
Thank you Emilie. I have to admit, the idea that one can ignore existential risk by an appropriate choice of discount factor never felt very plausible to me!
I was wondering whether you can account for timescales in this kind of analysis? Both abatement policies and climate feedbacks have lags associated with them. I could imagine these lags interacting in complicated ways to produce transient dynamics that are high risk.
Oh wow! This is so refreshing, Emilie!
Early on in the talk my heart sank when you went through the standard way of treating the problem, but then you did exactly the right thing, and very in the spirit of ergodicity economics: just throw out all this ill-constrained nonsense about utility and expectations and discounting and identify the actual physical problem.
In this case, the problem is potential ruin and the associated ergodicity breaking. You consider long-term survival as the desideratum and simply maximize its probability. People will argue about details, e.g. whether the long-time limit which produces the survival probabilities really is the regime to consider, or whether ruin has an appreciable probability at all. But I think your big contribution here is to totally throw over board the old arbitrariness, start with a completely fresh look at the problem, and identify a way of thinking about it that is undeniably relevant.
Very very nice! There have been a number of people who’ve just been “screaming into the void,” as one climate scientist put it to me, about the terribly misleading work in classical economics about this problem. But I haven’t seen such a nice constructive argument. I look forward to discussing this further.