GDP impartially consider'd

We start off in the usual home of bad ideas these days, Twatter. Wherein we find promulgated the thought that Nordhaus may be revered among economists, but ecologists have a very different opinion of his legacy. Many believe that the world's failure to pursue aggressive climate action over the past decades is in large part due to arguments Nordhaus has advanced. This is, of course, drivel. To be fair, as so often with bad ideas on Twatter, the "thought" isn't even novel; it's just a cut-n-paste from some nutter elsewhere. Why is this obvious drivel from nutters that no-one of any degree of sense would take seriously? Because this so massively over-states the degree to which theory, and theory of economics, has affected GW policy. A number of people, some of them very influential, have or had or thought they had excellent self-interested reasons for doing nothing about GW, and this really doesn't require any complex explanations.

Anyway, that's all largely beside the point, because the next stage is mt musing

As I think @jamesannan pointed out some years ago, why should I care whether my descendants are nine times or ten times as rich as I am today? 

Reducing climate impact to GDP is economics answering the wrong question, as well as answering it wrong.

This is the familiar issue²: can we reduce the impacts of GW down to something as crass, crude, distasteful - frankly, my dear, it smacks of trade - as money, when everyone knows that Gentlefolk don't deal with money themselves; they have people to do that for them. This is all familiar stuff, and in Economics and Climatology? from 2012 I was reacting to mt again, that time his:

economics... claims for itself a unique position among the sciences, as the crux, the central weighing mechanism, for all public decision-making.

To clarify (see the comments), mt wasn't objecting to there being a "central weighing mechanism"¹, his was objecting to it being economics; I think that he wanted to use the shared morality of civilization as his mechanism instead (and still does); when I tried to probe that (do we have one? How would you know? Do all countries have the same one?) the discussion got bogged down. My objection is that we likely don't have (globally) shared morality, no matter how easy agreement may be around dining tables, and that trying to use such a concept is a recipe for the current mess, not an escape from it. The point about the economics is that it does tell a lot of people that their pet solution is wrong.

Aaanyway, having gone through that and failed to agree yet again, we come to James "tricksy" Annan:

Have also been thinking a little about this recently. One issue is that GDP is a measure of annual turnover, it does not attempt to measure wealth in any way shape or form.

Of course, noting that GDP is not a measure of wealth or income is hardly new. Nonetheless my "Meh; yes, but of course no. Feel free to substitute some other measure; you'd get much the same answers" didn't go down well. If JA is critiquing the problem that GDP is a measure of income rather than wealth, then the answers are (a) yes that's true but uninteresting (if you think otherwise, please provide an interesting consequence); and (b) on the large scale of centuries, GDP growth is exponential, so they're proportional anyway. If he's critiquing the problem that it "only includes monetised transactions, includes government at what it costs rather than the value it adds, doesn't discuss the distribution of income or consumption, only the gross amount and so on and on" (which I think it rather closer to mt's point) then yes, OK, that's a known thing. But like many other known problems that nonetheless survive, it survives because it isn't easy to see a better alternative. Also, although the measure is imperfect, on the large scale there aren't any obvious consequences. Even if you use a rather elastic definition of the word subsidy, the present-day costs of GW aren't large so the stuff we're "missing" from GW related to FF use isn't large, so correcting it would only have a small impact.

Update

Some find this post hard to scute. Naturally, I'm delighted: I didn't spend long years getting an expensive education just so that any old bloke on the wub can understand my deep thoughts. As to what this post is about: read it. Like many of my posts, it doesn't have One True Theme; I'm more reacting the to-me-strange things other people say. It was kicked off, as you can tell by implication, by JA's tweet.

But if it has one theme, it is that nit-picking an idea is cheap; that many nits do not make a nat; that observing that GDP does not describe internal disparity is about as useful as noting the Climate Sensitivity doesn't either; nor does a Mean; yet all remain useful concepts widely used for lack of a better.

I don't think effects on GDP are the best, or at least a good, way of quantifying the effects of human induced climate change is a good summary of this post. I am forced into using GDP for quantifying impacts, but only if this is necessary; for example, for comparing present-day costs of emission reduction versus the future costs of the damage of those emissions aka SCC stuff. At the moment, GDP or some related measure is the only game in town if you want to do that. Throwing up your hands, abandoning the effort, and picking an arbitrary temperature threshold is probably worse; unless the SCC calculations are so uncertain as to be clearly dangerous, and we're forced to say nothing more than "it looks dangerous, we are unable to quantify the risk". I don't think that's true; and if it was true, I think it would be ineffective.

CIP also raises the "catastrophe" point. In answer I don't really have an answer. Of their nature, they are hard to predict or factor in; they add, in a very hard to quantify way, to risk, or if you prefer to "expected" cost.

Notes

1. As I said then, the only alternative to a central mechanism is a decentralised mechanism, where everyone uses their own prejudices. Which is the bad bits of the current political mess.

2. Or indeed two issues, because the "nine times or ten times as rich as I am today" leads off into yet another discussion, which I don't think we need to go into for the moment.

Refs

* Ship of fools.
* SHOCKING PRESIDENTIAL PORTRAIT  MARRS OTHERWISE RESPECTABLE PAPER ON MONKEY FECES
* The 2008 Financial Crisis - Arnold Kling