Michael Meeropol: Remembering Martin Weitzman, An Outstanding Economist And Citizen
On August 27, the economics profession lost a great man, Martin Weitzman, Professor Emeritus at Harvard University. The world has also lost a very important citizen. I was at Swarthmore College with him in the early 1960s and even then, he displayed a creative brilliance. He never became a pundit on television or in the newspapers, but in many areas of economic research he left his mark. His most important contribution, in my opinion, was in making it crystal clear that the cost of doing nothing to drastically cut carbon emissions in order to head off global warming ---no matter how uncertain the potential damages and no matter how far in the future those damages will occur will be so high that we must make the changes that reduce those emissions now. For that contribution, he deserved the Nobel Prize in economics. The entire world needed his strong voice to add support for the growing chorus --- led today by the young people of the world who have the most to lose from the inaction of the politicians – demanding action.
[For a short overview of his life’s work, see Sam Roberts, “Martin Weitzman, Virtuoso Climate Change Economist, Dies at 77.” The New York Times, September 4, 2019]
Weitzman focused his attention on what he called low probability catastrophic events. In the area of climate change there are a number of possible catastrophes. The worst of course is the potential release of methane gas currently trapped in permafrost and in the deepest coldest reaches of the oceans. If too much of that methane is released over the next 100 years, there is a danger (admittedly the probability is small) of reducing the amount of oxygen in the air (it should be about 18% for healthy breathing) below some danger level with drastic consequences [possibly extinction] for all oxygen breathing creatures on earth – including us. Short of that, global warming of 4 degrees or 6 degrees Celsius have potentially devastating consequences in terms of sea level rises, crop failures, rendering large swaths of the earth uninhabitable. (Causing large population declines, millions of people forced to migrate, and the real possibility of the collapse of civilization.) Weitzman showed, with sophisticated mathematic and statistical analysis that even if these problems will manifest themselves far in the future and even if there is a low probability that these catastrophes will actually happen, it is essential to take dramatic action now to head them off.
In an article entitled “Economics of Catastrophic Climate Change” Weitzman laid out the analysis. For those of us not able to follow his mathematics and statistics, (myself included) he presented his points in lay terminology in a short but powergul interview with the PBS news hour’s business reporter Paul Solman,
[All the quotes that follow are from “The Odds of Disaster: An Economist’s Warning on Global Warming” broadcast on the PBS Newshour, May 23, 2013]
“….increased atmospheric carbon dioxide concentrations lead to increased global average temperature. Increased global average temperatures lead to increased climate changes (and planetary changes, like higher sea levels). Increased climate (and planetary) changes eventually result in increased damages to humans and the planet.”
He then poses the question that is impossible to answer, and which is what trips up too many people trying to figure out what to do. “BY HOW MUCH” will all of these things change? In other words, when all is said and done about climate change, sea level rises, etc. --- How Much damage to humans and the planet are we looking at?
Weitzman acknowledges that there are significant uncertainties involved in answering these “how much” question --- questions about the impact of a 4 degree or 6 degree increase on the weather and sea level --- questions about the impact on humans, species of plants and animals, and the planet’s overall eco-system -- as the warming temperatures change the weather and sea level.
And those uncertainties provide fodder for the global warming denialists --- who with the exception of a handful of true scientists expressing skepticism – are either dishonest hired guns for the fossil fuel industry or truly incompetent. (This is a very important point. There are a handful of truly honestly skeptical climate scientists. But most of the so-called “science” used to justify doing nothing to stop global warming is junk science bought and paid for by the fossil fuel industry. [For details see Naomi Oreskes and Erik Conway, Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco to Global Warming (NY: Bloomsbury Press, 2010])
But here is where Weitzman makes the point that should be emblazoned in all our minds “… for an economist, abating CO2 emissions is like buying insurance against a catastrophe. We should cut back on CO2 emissions not only to lower the average damages, but, PERHAPS MORE IMPORTANTLY, to lower the probability of catastrophic damages.”
He notes that climate denial skeptics assert that the uncertainties mean that we might be wasting a lot of money and needlessly, for example, giving up cheap air travel and gas guzzling cars. But Weitzman has an answer.
“If we continue on a business-as-usual trajectory, then there is some NON-TRIVIAL PROBABILITY of a catastrophic climate outcome materializing at some future time. Prudence would seem to dictate taking action to cut back greenhouse gas emissions significantly. If we don’t start buying into this insurance policy soon, the human race could end up being very sorry should a future climate catastrophe rear its ugly head.”
My version of this is simple --- a catastrophic climate disaster imposes INFINITE costs --- the collapse of civilization – These disasters may have a low probability of occurring and, if they do occur, they won’t happen maybe for 100 years. But an infinite cost remains infinite no matter how many years in the future it will occur.
Most economists and other public policy people attempt to measure the costs of events that happen far in the future by recognizing that for us as individuals $100 today is worth more than $100 next year because, well, we don’t even know if we’ll be around to enjoy it next year. This is called DISCOUNTING THE FUTURE. Taking this to its logical conclusion – income 100 years in the future has virtually zero value today --- costs borne by our descendants in the future have virtually zero impact today. But if those costs are INFINITE, no matter how much we “discount” the future, the costs must be considered INFINITE to today’s decision makers.
Martin Weitzman demonstrated that with mathematical and logical precision but on some levels, it’s just common sense. Even those of us who do not have children or grandchildren know deep down in our heart of hearts that we want the world to be there for everyone’s children and grandchildren and all future generations.
That is why we must act now. That is why the young people are rallying behind the Swedish student, Greta Thunberg, who just sailed across the Atlantic to attend a global warming summit. That is one of the reasons why the loss of Martin Weitzman – a towering figure with a scientific megaphone warning us all like an Old Testament prophet – is such a serious loss for all of us, not just for economists.
Michael Meeropol is professor emeritus of Economics at Western New England University. He is the author with Howard and Paul Sherman of the recently published second edition of Principles of Macroeconomics: Activist vs. Austerity Policies.
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