The climate change sceptics have it right!
Posted April 3, 2008on:
Many climate change sceptics argue that the IPCC’s predictions are highly uncertain. Over at Vox, Paul Klemperer suggests that this should make us more worried, rather than reassuring us.
…[If] the models merely underestimated the uncertainty, the range of plausible outcomes is now greater, so… defences would need to be higher for us to feel safe.
Klemperer is implicitly relying on people’s risk aversion to claim that the increase in uncertainty makes us worse off. Standard economic theory is on his side here, but experimental work has shown that people are actually risk seeking when it comes to losses. Most people would rather gamble on a loss if there’s some possibility of averting it than take a small, certain penalty. That implies that the increase in uncertainty over the costs of climate change might actually make people feel better about it! Maybe the sceptics are pressing the right buttons after all.