Mark Hertsgaard’s Hot is reviewed  in the New York Times today. I am jealous. In fall 2010, I published a book on climate change adaptation but from the perspective of a “free market” economist.   We are both optimists about the globe’s ability to adapt to the scary challenge of climate change but we differ on why we have the capacity to adapt.  I emphasize the power of capitalism’s price signals to help stimulate migration, investment and innovation.
In contrast, the author of Hot embraces a multi-factor approach. “But most important, what Hertsgaard finds is that the ability to adapt to climate change depends as much on “social context†— defined as “the mix of public attitudes, cultural habits, political tendencies, economic interests and civic procedures†— as on wealth and technological sophistication.”  This looks like mush to me. He has listed so many factors that I see no way to disentangle their relative importance. Â
Here is what his Amazon review says; “Contrasting the Netherland’s 200-year flood plans to the New Orleans Katrina disaster, Hertsgaard points out that social structures, even more than technology, will determine success, and persuasively argues that human survival depends on bottom-up, citizen-driven government action.”  So, government will save us from climate change? I’d like to see the formal proof of this conjecture.
My book highlights cases in which government action increases adaptation challenges (by crowding out self-protection actions or by not allowing water prices to rise — “price gouging”). I am a “two handed” economist! I also discuss ways (such as land use zoning) in which government can be a “friend” of adaptation.    The interaction of individuals, firms and governments will determine our adaptation path but government will only be incentivized to step up if there is competition between jurisdictions for embracing adaptation friendly policies. If the tax base will get up and migrate away from risky areas, then local politicians have strong incentives to step up and deliver such policies! Here are the first 30 pages of his book.
I’m having trouble understanding the complaint, insofar as it goes beyond the acknowledged envy. Is the claim that the NYTimes (home of the Freakonomics blog, as well as Paul Krugman’s column & blog), or the media as a whole, gives too little attention to economics as opposed to other social sciences when it comes to explanation of social processes? If so, I not only disagree, but find it hard to imagine how one could come to think that.
I haven’t read either book, only the review and your linked précis. But I for one am far more interested in detailed case-studies of different local environments responding, or not, to climate-related challenges than in yet another applied-micro book. This is especially when, as you seem to acknowledge in the link, the largest challenges are in developing countries that lack 1) much purchasing power, at least per-capita; 2) particularly responsive institutions.
Apparently I commented before your post had been fully written/updated. Hmm. I’ll leave aside the ‘hippie flavor’ ad-hominem.
1. The idea that ‘exit’ is the only, or even the most powerful, source of pressure on local governments is neither theoretically justified nor empirically supported. Which is not to say it’s irrelevant.
2. Based purely on the review, it’s hard to see Hertsgaard as downplaying bad government policies.
Perhaps I’m being a bit grumpy. Hearing economists contemptuously dismiss ‘social context’ as a source of explanatory mechanisms does that sometimes. One would think this sort of thing would be less acceptable in polite blog-society in a post-Ostrom-Nobel world.
“but the NY Times does not want capitalism to star in its show”
I have not read either book, but certainly know from reading the NYT Book Review over the years that
its editor, Sam Tanenhaus, has a neocon slant in his choice of which books to review and the assignment reviewers to review them.
Books by conservatives are generally reviewed by conservatives, and often given multipage spreads.
For ideological diversity, books by liberals (those few that are) are generally reviewed by conservatives,
e.g., George Wills’ slime job on Rick Pearlstein’s Nixonland.
I think if I’m an editor doling out limited column-inches, and I’m going to have someone review one of the many books coming out on the subject, I’m going to chose the author with a longer track record and larger potential audience. And Earth Odyssey opened a lot of eyes. And I’ve lent out my Green Cities a couple of times and my friends who haven’t had a couple econ courses didn’t finish it. Jus’ sayin’ about audience size.
I’d rather capitalism did not star as Oedipus Rex, killing society and raping mother earth, before blinding itself to its own wilful responsibility, but that’s the script, apparently.
Maybe you can tell me how my hometown on the Georgia coast (elevation: 4-12 feet above sea level) is going to function in the free market under 10-20 feet of salt water? I’m all ears. And gills. And webbed feet. Wait, I remember something that may help me understand! Newt Gingrich once mentioned that extinctions have happened since the beginning of life, so anthropogenic extinction events don’t matter in the long run. Therefore anthropogenic inundation of the earth’s coasts won’t matter either. Never mind. But who was it that said the long run doesn’t matter, since in the long run we are all dead? Famous economist, if I’m not mistaken.
The real problem with optimism is that I believe the received wisdom, the literature and market data still indicate that markets look forward roughly five years. Climate change does not. Change things today, and your payoff is much, much further than five years out. Invest today, and your payoffs are on a similarly long horizon. I don’t see capitalism being any help. Sure, when things get bad there will be price signals and markets will respond, but by then the disaster will be upon us.
But my pessimism is not theoretical. I base it on our — ‘our’ here includes capitalism, natch — inability to save world fisheries.
If governments, capitalism and individuals can’t save fisheries on a short time horizon, we are screwed on climate with a long one.
@KLG & wcw: You both hit the nail.
I’m not so sure the human species is doomed to extinction from climate change but the near term (next century or so) don’t look too rosey as to the continuation of civilization as we have come to know it. When a few thousand years of infrastructure goes under salt water at the same time rain, wind and temperature paterns make tillable land nonproductive 7 or so billion people have got some serious shaking out to do. Not pretty folks.
Worst case cenario may be how people choose to use the weapons hanging around while the existing political structures come unglued.
Capitalism can’t even figure out how to run the banks honestly. If anybody believes those boys are going to do anything but hire thugs to guard their gated communities until the thugs figure out that all that paper ain’t worth squat and turn the guns on their patrons… well there’s a bridge that is under water in a place that used to be called Brooklyn.
Maybe you can tell me how my hometown on the Georgia coast (elevation: 4-12 feet above sea level) is going to function in the free market under 10-20 feet of salt water? I’m all ears.
Simple. You’ll migrate and purchase new memories of your childhood, and purchase a new neighborhood to return to when nostalgic. Or maybe Big pHrma will innovate a new drug to make you forget the pain of loss. And surely Public Storage will try to innovate a way to preserve old neighborhoods now under water.
But look on the bright side: new reefs for any fishes still left!
WCW: That five-year number may be optimistic as well. If high-frequency trading does indeed account for the bulk of volume in the US stock market, we’re talking about a time horizon of about 250 milliseconds. And thanks to the variety of financial innovations, you can make at least as much money betting that a stock will go down as that it will go up. Companies themselves may or may not have longer horizons (see the recent reporting about Goldman-Sachs partners hedging their expected returns from stock compensation), but once again actually-existing markets offer at least as many opportunities to profit from failure as from success.
What’s crucial is the market institutions and regulations that favor certain kinds of investment strategies and bricks-and-mortar business plans while disfavoring others. So now we’re back to social context.
“So, government will save us from climate change? I’d like to see the formal proof of this conjecture.”
Hmm, the Netherlands successfully build against 200 year flood levels because it matters to them. But to an academic economist the question is always: “sure it works in practice, but DOES IT WORK IN THEORY?”
Accounting for the differences in culture and institutions between the Netherlands and New Orleans is the question that ought to interest us. Certainly, it’s the question that interests ME as a potential buyer of serious non-fiction books. The obvious answer (offered without formal proof) is: the Netherlanders are ALL IN IT TOGETHER. Americans, not so much. As long as the K Street government can dump the inconvenient externalities on some poor folks, the Federal attitude will remain “can’t do”.
I recognize that you’re new to blogging, Prof. Kahn, but you should probably be aware of, and try to follow, the usual convention of stating clearly (“UPDATED 2/8”) when you revise something previously posted, even if it’s mostly edits for clarity. It can be frustrating for interlocutors to see what they’ve responded to change without acknowledgment.