| Session | ||
Thematic Session 6: Welfare criteria for environmental issues
Organizers: Frikk Nesje (University of Copenhagen) and Paolo Piacquadio (University of St. Gallen)
| ||
| Session Abstract | ||
|
The overarching theme of the papers presented in this session is social values in environmental and resource economics. Any analysis of environmental issues and policies requires a careful consideration of both facts and underlying social values. Over the past couple of decades, economists have largely focused on uncovering factual insights through excellent econometric, experimental, and quantitative research. However, this shift in the field often resulted in value judgments becoming implicit. The session aims to broaden the focus on social values and their applications in resource and environmental economics. The selected papers collectively contribute to this theme by exploring various dimensions, including the impact of disagreement on climate sensitivity on climate targets, the quantity-quality tradeoff in population ethics, the role of welfare weights in shaping environmental regulations, and the attitudes towards discounting and inequalities in theories of intergenerational justice. | ||
| Presentations | ||
Disagreement Aversion 1ETH Zurich; 2CNRS; 3CIRED; 4RPTU Kaiserslautern-Landau Experts often disagree. A decision-maker may be averse to such expert disagreement. Existing models of aversion to expert disagreement rest on ambiguity-averse preferences adopting a unanimity principle: If all experts consider one choice better than another, so should the decision-maker. Such unanimity among experts, however, can be spurious, masking substantial disagreement on the underlying reasons. We introduce a novel notion of disagreement aversion to distinguish spurious from genuine unanimity and develop a model that can capture disagreement aversion in our sense. The central element of our model is the cautious aggregation of experts' beliefs. Intergenerational Population Ethics University of St. Gallen, Switzerland In recent decades, the world has witnessed dramatic shifts in population dynamics, expanding to 8 billion. Understanding and effectively assessing these dynamics and the associated policies is crucial, yet both the academic and policy-making communities lack a consensual welfare criterion for evaluating varying population scenarios. This paper reexamines population ethics and policy assessment within the framework of intergenerational resource allocation with an endogenously determined population. Our novel proposal sets the balance between generational well-being and population size by respecting parental fertility preferences. Through an axiomatic approach, we unveil a family of recursive welfare criteria that are both simple and intuitive. These criteria extend the principles of discounted utilitarianism and sidestep the contentious issues plaguing existing population axiologies. Welfare-Maximizing Climate Policy and the Role of Climate Finance (JOB MARKET) Yale University, United States of America This paper examines how optimal carbon prices that ignore intratemporal inequality compare to optimal carbon prices that account for inequality and the distribution of the costs and benefits of reducing emissions. Using a theoretical model, I identify plausible conditions under which accounting for inequality increases optimal emission reductions in the absence of international transfers. In numerical simulations with the integrated assessment model RICE, I find that accounting for inequality results in lower optimal global emissions, both if carbon prices are allowed to be regionally differentiated and if they are constrained to be globally uniform. I then assess how the Paris Agreement transfer of $100 billion per year affects optimal carbon prices. I find that optimal emission reductions increase considerably if the transfer is used to finance mitigation projects in developing countries. Intergenerational Discounting and Inequality 1University of Copenhagen, Denmark; 2University of St. Gallen, Switzerland We study theories of justice that disentangle normative views on intergenerational discounting and intergenerational inequality. Any modular social welfare function is uniquely identified by a time-discounting function---capturing attitudes across generations---and an aggregator function---capturing attitudes towards inequality. The rich choice of such functions allows our theories to include the most common welfare criteria adopted in the literature as special cases and unveils yet unexplored families of alternative criteria. Our axiomatic characterization clarifies the properties and limits of disentangling discounting and inequality. | ||