Economists greatly underestimate the price tag on harsher weather and higher seas. Why is that?

Or, Opinion: Climate Change Will Cost Us Even More Than We Think, by Naomi Oreskes and Nicholas Stern in the NYT. NO's involvement is unpromising, but vaguely sane people twote it, so let's read on. But before I do, some more snark: the NYT op-ed says it is "explained in a recent report by scientists and economists"; naturally, Stern being a shy retiring fellow modestly doesn't mention that he is one of the authors of the said report.

The first thing to do is to search for the word "discount", because as we know, that's most of it. It says in the summary:

Economic assessments that are expressed solely in terms of effects on output (e.g.
gross domestic product), or that only extrapolate from past experience, or that
use inappropriate discounting, do not provide a clear indication of the potential
risks to lives and livelihoods.

But don't get too excited: that was my bold, and it's three quarters of the way down the summary. It also rather delicately doesn't discuss what "inappropriate" might be - something that Stern doesn't like, perhaps. Very similar text appears lower down in the "Why the risks have been missed, omitted or unquantified" section, but again there's no discussion; it's treated as given that the weight of economic opinion is wrong (actually, not even that; if you read just the report you'd get the impression that people are mysteriously using "inappropriate" discount rates for apparently no reason at all), and the report's authors are so trivially correct that they don't need to explain why. This is a pattern for Stern.

Otherwise, we're underestimating the costs because

Economic assessments of the potential future risks of climate change have been omitting or grossly underestimating many of the most serious consequences for lives and livelihoods because these risks are difficult to quantify precisely and lie outside of human experience...

• Destabilisation of ice sheets and glaciers and consequent sea level rise
• Stronger tropical cyclones
• Extreme heat impacts
• More frequent and intense floods and droughts
• Disruptions to oceanic and atmospheric circulation
• Destruction of biodiversity and collapse of ecosystems

But most of those are included. There's a section in the report for each. The tropical cyclones one, for example, tells us that TCs will get bigger blah blah but we know that already; there's nothing omitted there; what the section rather pointedly fails to include is any analysis showing why or how this effect is omitted from damage estimates. Ward, also an author on the report, has form in this area too. RP Jr also notes that Greenland ice sheet SLR has not been missed.

Extreme heat impacts is much the same. This isn't omitted from damage estimates  (e.g. 4th National Climate Assessment report: Labour).

Risks

However, I have a lot of sympathy with:

The biggest risks from climate change are associated with consequences that are unprecedented in human history and cannot simply be extrapolated from the recent past. As such they are uncertain and difficult for scientists to quantify in physical terms. Furthermore, the resulting consequences for lives and livelihoods can be difficult to determine because they involve assumptions about the resilience of populations, their capacity for adaptation and their ability to move in a crowded world. The cascading risks that can result from these impacts can be difficult to predict precisely and to capture in simulations using current models. These uncertainties mean that the impacts are difficult to represent in terms of costs and benefits and are therefore often ignored or omitted from economic models.

Although I'm doubtful that "omitted" is correct. But, there's nothing new there: this is the well know uncertainty-is-not-your-friend problem. What does the report add to the sum of human knowledge?

Runaway tipping elements of no return

(update) Ah, I missed out the "tipping points" stuff; or "tipping elements" (or was that only briefly fashionable?). From the NYT:

In economic assessments of climate change, some of the largest factors, like thresholds in the climate system, when a tiny change could tip the system catastrophically, and possible limits to the human capacity to adapt, are omitted for this reason. In effect, economists have assigned them a value of zero, when the risks are decidedly not. One example from the report: The melting of Himalayan glaciers and snow will both flood and profoundly affect the water supply of communities in which hundreds of millions of people live, yet this is absent from most economic assessments.

But again, Stern has run off the rails. Glacial melt is a real effect, and quite likely a real problem, but it isn't really a tipping point problem. There's an albedo feedback effect, but that's different (well, that leads towards the entire difficult discussion of whehter the tipping points stuff means anything much).

Refs

* Societal tipping points - ATTP. There's a semi-good-point: [Economists] approach climate damages as minor perturbations around an underlying path of economic growth... Hence, this type of analysis cannot even address the question of whether or not there might be societal tipping points; it assumes, by definition, that there aren’t any. the problem is that this idea doesn't go anywhere other than "we should think about it".
* The Biggest Threat To Climate Science Comes From Climate Advocates - Roger Pielke, Forbes.
* Consistency & freedom - Don Boudreaux
* Climate Chickenhawks

* Duflo and Banerjee's Deficient Thinking on Incentives, Part I by David Henderson