Stan Alcorn, publisher of the Hippolytic--"Yale's Leading Progressive Student Publication," which implies there's more than one, right?--sent me a link to this discussion of Gus Speth's take on William Nordhaus' take on the Stern report. My take away from the discussion:
- John was right and quicker than most to pick up on it, the discount rate in the Stern Report is too low.
The problem Nordhaus focuses on is its “social discount rate”, chosen to be .1 percent, lower by an order of magnitude than that chosen by a conventional economist. In layman’s terms, Stern effectively presented effects far in the future as having (nearly) equal weight as effects next year.
- Dean's of Forestry and Environmental Studies don't like cost/benefit type reports.
As Speth notes, “…the whole (messy) discounting business presumes everything can be reduced to dollars.” It gives economists employment and politicians nice, numerical talking points, but it may not be the boon to decision-making it first appears. Whatever the exact figures are, their continued discussion causes them to grow, along with the unknown, un-figure-able impacts.
