2.5.5.3. Ensuring Equity
All of the complications outlined in Section 2.5.5.2
lead to a sad conclusion: Economics may be able to highlight a large menu of
distributional issues that must be examined, but it has trouble providing broad
answers to measuring and accounting for inequity, particularly across nations.
Recourse to ethical principles clearly is in order.
2.5.6. Alternative Metrics for Measuring Costs
Application and extension of the economic paradigm certainly focuses attention
on cost measures that are denominated in currency, but practitioners have been
criticized on the grounds that these measures inadequately recognize nonmarket
costs. Schneider et al. (2000), for example, have listed five numeraires or
metrics with which the costs of climate change might be captured. Their list
includes monetary losses, loss of life, changes in quality of life (including
a need to migrate, conflict over resources, cultural diversity, loss of cultural
heritage sites, etc.), species or biodiversity loss, and distributional equity.
Chapter 19 recognizes the content of these diverse numeraires
in exploring magnitudes and/or rates of climate change that might be dangerous
according to three lines of evidence: threatened systems, distributions of impacts,
and aggregate impacts. The implications of the fourth line of evidence, large-scale
discontinuous events, are then traced along these three dimensions.
When all is said and done, however, costs denominated in one numeraire must
be weighed, at least subjectively, with costs denominated in another—and
there are no objective quantitative methods with which to do so. A survey conducted
by Nordhaus (1994a), however, offered some insight into 15 researchers'
subjective views of the relative importance of several different measures along
three different "what if" scenarios. Table 2-1
displays some of the results in terms of anticipated cost denominated in lost
world GDP, the likelihood of high-consequence impacts, the distribution of costs
across the global population, and the proportion of costs that would be captured
by national income accounts. The survey results shows wide disagreement across
the first three metrics; this disagreement generally can be explained in terms
of a dichotomy of views between mainstream economists and natural scientists.
Nonetheless, Nordhaus (1994a) reports that a majority of respondents held the
view that a high proportion of costs would be captured in national accounts.
It would seem, therefore, that natural scientists think that mainstream economists
not only underestimate the severity of nonmarket impacts but also that the implications
of those impacts into the monetized economy do not follow.
Multi-attribute approaches also could be applied in climate impact analysis.
They have not yet found their way into the literature, however, except to the
degree to which they are captured in indirect methods outlined above. Chapter
1 also notes that cultural theory can serve as a valuation framework.
