On welfare frameworks and catastrophic climate risks

Millner, Antony

doi:10.1016/j.jeem.2012.09.006

Cited by 89 publications

(60 citation statements)

References 62 publications

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“…This theorem is obtained under a utilitarian SWF and a CRRA wellbeing function (see Millner 2013). It is essentially due to the fact that the marginal moral impact of consumption ∂u(c) ∂c = c −α goes to infinity at zero consumption under CRRA.…”

Section: Negative Well-beingmentioning

confidence: 98%

“…A common way to deal with ethics in economics is through the specification of the "social welfare (2007) about time discounting (Dasgupta 2008;Sterner and Persson 2008;Roemer 2010) and about the treatment of risk (Weitzman 2011;Millner 2013;Botzen and van den Bergh 2014) have illustrated the importance of the SWF specification. Recently, several papers have examined empirically the sensitivity of climate policy to the SWF (Llavador et al 2011;Dietz and Asheim 2012).…”

Section: Introductionmentioning

confidence: 99%

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Prioritarianism and Climate Change

Adler

Treich

2015

Environ Resource Econ

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Prioritarianism is the ethical view that gives greater weight to well-being changes affecting individuals at lower well-being levels. This view is influential both in moral philosophy, and in theoretical work on social choice-where it is captured by a social welfare function ("SWF") summing a concave transformation of individual well-being numbers. However, prioritarianism has largely been ignored by scholarship on climate change. This Article compares utilitarianism and prioritarianism as frameworks for evaluating climate policy. It reviews the distinctive normative choices that are required for the prioritarian approach: specifying a ratio scale for well-being (if the prioritarian SWF takes the standard "Atkinson" form); determining the degree of concavity of the transformation function (i.e., the degree of social inequality aversion); and choosing between "ex ante" and "ex post" prioritarianism under conditions of risk. The Article also sketches some of salient implications of a prioritarian SWF for climate policy-with respect to the social cost of carbon, the social discount rate, optimal mitigation, and the "dismal theorem." Finally, it discusses the issue of variable population.

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Section: Negative Well-beingmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

Prioritarianism and Climate Change

Adler

Treich

2015

Environ Resource Econ

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“…Defining suitable group preferences is especially hard when group composition or size changes over time as in intergenerational models (Millner, 2013). Also, in complex organizations, real decisions might be nonoptimal for the group and more explicit models of actual decision procedures may be needed.…”

Section: Aggregation Of Preferences: Social Welfare and Votingmentioning

confidence: 99%

Towards representing human behavior and decision making in Earth system models – an overview of techniques and approaches

et al. 2017

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Abstract. Today, humans have a critical impact on the Earth system and vice versa, which can generate complex feedback processes between social and ecological dynamics. Integrating human behavior into formal Earth system models (ESMs), however, requires crucial modeling assumptions about actors and their goals, behavioral options, and decision rules, as well as modeling decisions regarding human social interactions and the aggregation of individuals' behavior. Here, we review existing modeling approaches and techniques from various disciplines and schools of thought dealing with human behavior at different levels of decision making. We demonstrate modelers' often vast degrees of freedom but also seek to make modelers aware of the often crucial consequences of seemingly innocent modeling assumptions.After discussing which socioeconomic units are potentially important for ESMs, we compare models of individual decision making that correspond to alternative behavioral theories and that make diverse modeling assumptions about individuals' preferences, beliefs, decision rules, and foresight. We review approaches to model social interaction, covering game theoretic frameworks, models of social influence, and network models. Finally, we discuss approaches to studying how the behavior of individuals, groups, and organizations can aggregate to complex collective phenomena, discussing agent-based, statistical, and representative-agent modeling and economic macro-dynamics. We illustrate the main ingredients of modeling techniques with examples from land-use dynamics as one of the main drivers of environmental change bridging local to global scales.

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“…Public goods are also briefly discussed in a dynamic context, but the model is very different otherwise and is based on a first-best setup. 3 The choice of discount rate is perhaps the most discussed issue in the economics of global warming; see, e.g., Nordhaus (2007), Stern (2007), Weitzman (2009Weitzman ( , 2010, and Milner (2013). See Johansson-Stenman and Sterner (2012) for an analysis of the optimal social discounting rule when relative consumption matters.…”

mentioning

confidence: 99%

State-variable public goods and social comparisons

Aronsson

Johansson‐Stenman

2014

Journal of Environmental Economics and Management

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JEL classification: D62 H21 H23 H41 a b s t r a c tThe optimal provision of a state-variable public good, where the global climate is the prime example, is analyzed in a model where people care about their relative consumption. We consider both keeping-up-with-the-Joneses preferences (where people compare their own current consumption with others' current consumption) and catching-up-withthe-Joneses preferences (where people compare their own current consumption with others' past consumption) in an economy with two productivity types, overlapping generations, and optimal nonlinear income taxation. The extent to which the conventional rules for provision of state-variable public goods (a dynamic analog of the Samuelson rules) ought to be modified is shown to clearly depend on the strength of the relative concerns of both kinds, but also on the preference elicitation format. & 2014 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). IntroductionHow much should we spend to combat climate change? Naturally, the answer depends on many factors such as the links between environmental damage and abatement investments, discounting issues, and on the nature of our preferences. It also depends on how the funds for the investment are raised and on related second-best problems of the economy, including how such investments interact with the use of other policy instruments. The present paper concerns the optimal provision rule for a state-variable public good, such that the public good can be seen as a stock that changes over time, in a dynamic economy where people have positional preferences for private consumption. The latter means that people derive utility from their own private consumption relative to that of others -a notion with solid support in both questionnairebased experiments and happiness research. 1 The problem of characterizing the optimal provision of public goods under relative consumption concerns is not new in itself; it has been analyzed in a static setting with lump-sum taxes by Ng (1987), Brekke and Howarth (2002), and Aronsson and Johansson-Stenman (2014a), and in a static setting with second best taxation by Wendner and Goulder (As a consequence of using static models, all these studies have focused on cases where the public good (or bad) is a flow variable, and where the concept of relative consumption lacks a time-dimension. To our knowledge, the optimal provision of public goods under relative consumption concerns in a second-best economy has never been analyzed in a dynamic context, although Brekke and Howarth (2002), Wendner (2003), and Howarth (2006 have examined the implications of environmental externalities in dynamic models where relative consumption matters. 2 There is also a sizable literature on economic growth in models with relative consumption concerns (e.g.. Since this dynamic public good provision problem obviously is more complex than its static counterpart, one may wonder whether t...

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On welfare frameworks and catastrophic climate risks

Cited by 89 publications

References 62 publications

Prioritarianism and Climate Change

Prioritarianism and Climate Change

Towards representing human behavior and decision making in Earth system models – an overview of techniques and approaches

State-variable public goods and social comparisons

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