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A matter of degrees

Marianne Fay's picture


For economists interested in climate change, some news.  The long awaited regional version of Bill Nordhaus'  DICE model is now out. (Actually it’s been out since February, but I just got to it...) It’s called RICE with the ‘R’ standing for Regional.  A quick overview of some of the key results can be downloaded here.

Nordhaus is one of the earliest and most prominent climate modelers in the economics profession.  He and Nicholas Stern are often set up as the two book ends of the climate change economists’ spectrum.  I believe their differences are not that great.

Disasters: what is the cost ?

Julia Bucknall's picture

Buried under the most snow since records have been kept, as we are right now in Washington, the mind turns naturally to the effects of  extreme weather events. Clearly the impacts for those of us with solid housing and uninterrupted WiFi access are minimal compared with the impacts of extreme weather for most people in the world.  But even here we can see a combination of effects -- the costs of closing offices or of running through the whole winter's supply of firewood in  one week, at the same time as the economic uptick for those who repair household boilers, restore downed power lines or dig people's cars out  of the snow or shovel their sidewalks for a fee. Since climate change is expected to increase the frequency and severity of extreme weather  events, figuring out the net cost of natural disasters is an important topic.  And figuring out sensible ways to reduce those costs is also  going to be increasingly important.

At the World Bank last week, we had an interesting seminar from Stéphane Hallegate from the French International Centre for Research on Environment and Development and the National Meteorology School that shed light on some of these issues. Stéphane has modelled the impacts of a number of natural disasters looking at both the direct costs of  the disaster (how much does it cost to rebuild structures that were destroyed?) and the indirect costs (what is the cost of a business  being closed for several months net of any local economic benefits that may occur as reconstruction starts). 

The Nobel Prize Committee pays attention to governance of the commons

Marianne Fay's picture

The Nobel Prize in Economic Sciences is being shared this year by Elinor Ostrom, a political economist at Indiana University, and Oliver Williamson, an economist at UC Berkeley. The award could not be more appropriate in these times of rethinking what markets can and cannot do. 

The award to Ostrom, who has spent her professional life studying how societies manage common resources is particularly relevant as we draw closer to the Copenhagen summit and countries are busy defining what they are willing to do to protect the global atmospheric commons. 

In fact, Ostrom wrote a background paper for us earlier this year for the World Development Report 2010: Development and Climate Change.  In it, she took exception to the notion that a solution to global change must be global. Such a solution would take too long, she argued. She also reminded us that a solution negotiated at the global level, if not backed up by a variety of efforts at the national, regional, and local levels, was not guaranteed to work well. This is because climate change is the result of many individual and local decisions.