Downplaying economic pain

In: Uncategorized

16 Aug 2009

Partha Dasgupta, a professor of economics at Cambridge University and a patron of the Optimum Population Trust, tries to play down the costs of dealing with climate change in a lecture to the Sante Fe Institute. He argues that the costs of dealing with climate change could amount up to 10% of the GDP of the rich countries equivalent to trillions of dollars. But since GDP has grown at an average rate of about 2% a year for the past 30 years such a loss would mean going back to the way things were four or five years ago. Since things were not so bad then, he argues, going back to the recent past would not be a big deal.

Such an outlook reveals exceedingly low horizons. For example, think of the pain caused by the recent global economic crisis. Yet, according to the latest estimate from the International Monetary Fund, output in the advanced economies will fall by only 3.8% this year. In any case the world is not nearly rich enough to tackle all the challenges it faces now – let alone if it was 10% poorer.