Intergenerational equity under catastrophic climate change
Aurélie Méjean (CNRS, Paris), Antonin Pottier (Centre d’Economie de la Sorbonne), Stéphane Zuber (Paris School of Economics - CNRS) and Marc Fleurbaey (Princeton University)
GPI Working Paper No. 5-2020, published in Climatic Change
Climate change raises the issue of intergenerational equity. As climate change threatens irreversible and dangerous impacts, possibly leading to extinction, the most relevant trade-off may not be between present and future consumption, but between present consumption and the mere existence of future generations. To investigate this trade-off, we build an integrated assessment model that explicitly accounts for the risk of extinction of future generations. We compare different climate policies, which change the probability of catastrophic outcomes yielding an early extinction, within the class of variable population utilitarian social welfare functions. We show that the risk of extinction is the main driver of the preferred policy over climate damages. We analyze the role of inequality aversion and population ethics. Usually a preference for large populations and a low inequality aversion favour the most ambitious climate policy, although there are cases where the effect of inequality aversion is reversed.
Other working papers
Cassandra’s Curse: A second tragedy of the commons – Philippe Colo (ETH Zurich)
This paper studies why scientific forecasts regarding exceptional or rare events generally fail to trigger adequate public response. I consider a game of contribution to a public bad. Prior to the game, I assume contributors receive non-verifiable expert advice regarding uncertain damages. In addition, I assume that the expert cares only about social welfare. Under mild assumptions, I show that no information transmission can happen at equilibrium when the number of contributors…
Exceeding expectations: stochastic dominance as a general decision theory – Christian Tarsney (Global Priorities Institute, Oxford University)
The principle that rational agents should maximize expected utility or choiceworthiness is intuitively plausible in many ordinary cases of decision-making under uncertainty. But it is less plausible in cases of extreme, low-probability risk (like Pascal’s Mugging), and intolerably paradoxical in cases like the St. Petersburg and Pasadena games. In this paper I show that, under certain conditions, stochastic dominance reasoning can capture most of the plausible implications of expectational reasoning while avoiding most of its pitfalls…
Estimating long-term treatment effects without long-term outcome data – David Rhys Bernard (Paris School of Economics)
Estimating long-term impacts of actions is important in many areas but the key difficulty is that long-term outcomes are only observed with a long delay. One alternative approach is to measure the effect on an intermediate outcome or a statistical surrogate and then use this to estimate the long-term effect. …