The Problem With Nordhaus
By David Henderson
William D. Nordhaus, one of the leading economists in studying the effects of global warming, is a first-rate economist. Indeed, he was co-winner of the 2018 Nobel Prize in economics for his work on global warming. Unfortunately, he sometimes abandons economics and even basic reasoning to make his case that global warming is likely to do great harm and that the only solution is a global tax on carbon. I noticed this tendency in his 2012 article in the New York Review of Books. In it, he challenged a Wall Street Journal article by sixteen scientists who were/are global warming skeptics. There’s nothing wrong with challenging them, but Nordhaus did so, in part, by responding to claims they hadn’t made.
Earlier this year, Nordhaus published The Spirit of Green: The Economics of Collisions and Contagions in a Crowded World. In it, he advocates a global tax on carbon, but his style of arguing has, if anything, gotten worse. At various points, he makes his case well, arguing that carbon usage creates a negative externality: a cost imposed on others that users of carbon don’t take account of in their decisions. He distinguishes his own thinking from that of advocates of the Green New Deal, pointing out that the GND is not primarily about environmental policies but about taking income from some and giving it to others. Nordhaus calls this redistribution “fairness,” but at least he doesn’t claim that it’s about the environment or global warming.
Unfortunately, Nordhaus doesn’t seriously consider the arguments of global warming skeptics and instead calls them “deniers.” He also gives short shrift even to his own Dynamic Integrated Climate-Economy (DICE) model, a model whose bottom line is that too high a carbon tax can be more destructive than a zero carbon tax. He also, disappointingly, makes the obligatory attack on the Koch brothers, something I had not seen him do in his previous work. Moreover, Nordhaus claims, incorrectly, that the only way to have an effective policy of global warming is to raise the price of carbon.
These are the opening 3 paragraphs of David R. Henderson, “The Problem with Nordhaus,” Defining Ideas, August 27, 2021.
While Nordhaus has never been particularly fair in his treatment of those he disagrees with, he has become even less fair. In a chapter titled “Green Corporations and Social Responsibility,” one of the corporations that he consigns to Dante’s “ninth circle of hell” is ExxonMobil. Why? He claims that the company suppressed the science of climate change and funded “climate deniers.” Nordhaus never tells the reader exactly what a “denier” is, but in context it seems to include those who doubt that global warming is occurring, those who doubt that it will be very harmful, and those who are skeptical about government solutions. In one passage, Nordhaus writes, “I have studied climate science for decades and find it solid and convincing. But there are skeptics.” He seems to be saying that because he, William Nordhaus, finds climate science persuasive and convincing, that should be enough to persuade us. Yet in a 355-page book, Nordhaus hardly discusses the science at all, apparently expecting that an argument from authority is sufficient. And he makes the case against skeptics not by quoting the large number of climate scientists who are skeptics but, rather, by quoting only one scientist and mentioning Donald Trump, US Senator James Inhofe, and an adviser to Vladimir Putin.
Read the whole thing.
Here’s his bio at David R. Henderson, ed. The Concise Encyclopedia of Economics.