Ecological transition: we must get out of the cost-benefit diktat!

in the columns Challenges, economist Christian Gaullier recently warned against the risk of climate action outpacing economic rationality. He laments “the lack of willingness to quantify the public costs and benefits of green actions, as if the climate allows us to escape rationality and enlightenment.” But, in this case, isn’t it set up as a mentor to obey this cost-benefit calculation, which should, on the contrary, remain an instrument that slows down environmental action?

The extent of the exercise of comparing the costs and benefits of isolated public action should not be overestimated. He is bound to simplify, and his conclusion lies entirely in his assumptions. When Christian Gaullier examines whether the speed limit should be reduced from 130 to 110 km/h on the motorway, he compares the benefit of reduced CO2 emissions with the cost of additional time spent in the car. Accidents and deaths prevented, the consequences of using public transport, what we did with our time off work… All this was drained. And for good reason: basically, the exercise is about putting a price on something that doesn’t exist, so you may not have many prices to choose from.

Protecting the climate is priceless

Here, to have only two prices to choose from, the comparison is reduced to two effects: carbon ton avoidance and lost time price, which is no longer an easy task and with as many possible outcomes as the chosen prices. . “Energy savings are very poor,” concludes Christian Gaullier, given that the time saved traveling at 130 km/h would be devoted entirely to work and the current price of a ton of carbon in the European CO2 market. to make up for our loss of time.”

Read alsoReducing the speed limit to 110 km/h on the highway: wrong, good environmental idea

When we think we can put a price on everything, are we coming out of the Enlightenment or, conversely, out of the marketer’s darkness? Can the cost of climate protection and our lives be reduced to market prices? Are they even proportional? When each degree of warming becomes less important to meeting our climate goals, isn’t the value of a ton of carbon avoided infinite? Isn’t the time lost individually today infinitely less valuable than the time we gain together tomorrow if we can save the planet’s habitability? These values ​​must be determined in terms of our present well-being, but also in accordance with the collective interests that threaten tomorrow for our children and their children.

The logic of the market is not the only logic that enables coordination. In this case, it is more about environmental disturbances that need to be addressed than their elimination.

Take a systematic approach

When we ask ourselves whether everything is calculable, measurable, additive, probabilistic, and reducible to monetary units, are we emerging from the light, or, conversely, from scientific obscurity? The ecological question is systemic in nature. Its cure requires a sequence of all actions carried out by a common vision and aimed at the same goal, that is, that our collective well-being conforms to planetary constraints.

From individual well-being to the most rigorous economic measure, the assessment of a single measure in isolation from others is at odds with the systematic approach required. Climate change and biodiversity loss cannot be reduced to simple measurable economic and financial costs, but plunge us into a radical uncertainty of economic, social, ethical dimensions, as well as physical, chemical, biological, turning points and irreversibility at this level. thresholds beyond which we don’t know what will happen, so it’s completely improbable. All this should make us more modest in our calculations and more decisive in the measures to be taken.

When Nobel’s research gets in the way of climate action

Economic calculation can even turn out to be illogical. Watch economist William Nordhaus (2018 Nobel Prize in Economics, editor’s note) introduce climate to macroeconomics through this cost-benefit analysis. As a result, he argues, the cost of 6°C warming (which climatologists say would make the planet largely uninhabitable for humans) would be limited to 8.5 points of GDP, and the optimal level of warming would be 3.5. °C (At warming levels above 2°C, the IPCC emphasizes that the risk of extinction, destruction and collapse of ecosystems increases rapidly)! Such calculation has hitherto hindered public action more dangerously than it has aided it.

If green measures are decided on the basis of what has the most benefits and the least costs, we will do less for the climate. Because many of them are expensive and do not pay off, not enough or quickly, for example, energy renewal, transport infrastructure, ecosystem protection, pollution, support, etc. The commercial logic of economic and financial profitability will force us to abandon it.

These costs, essential for ecological bifurcation, but financially harmless, will only be possible by going beyond the market and financial logic: it is the central bank that finances them without going through the debt market and under democratic control.

By Jézabel Couppey-Subeyran, lecturer in economics at the University of Paris 1 Panthéon-Sorbonne and scientific adviser at the Veblen Institute, and Ivar Ekelan, professor emeritus of mathematics at the University of Paris Dauphine.

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