What Economics Gets Wrong About Climate Change
Breaking down mainstream economic perspectives, and why our economics is ill-equipped for the challenge of climate and ecological crisis.
What would you say a human life is worth? According to the US government, for an American it’s about $7.2 million, compared with the global average of approximately $1.3 million. If you’re Swiss though, you’re worth a pretty penny at $9.4 million.
While these estimates might sound absurd, they are important to understand: these kinds of figures and the models that produce them are a core part of how mainstream economics understands and shapes policy, and they have had a significant role in how governments have responded (or failed to respond) to the climate crisis. In this episode, Adrienne and celebrated economist Ha-Joon Chang break down what mainstream economics gets wrong, and why it has proven so ill-suited to a challenge like climate and ecological crisis, not least by reducing complex decisions to abstract cost-benefit analyses.
Ha-Joon Chang is a celebrated economist and Research Professor at SOAS, University of London. He taught previously at the University of Cambridge for three decades, and has been an advisor to several international organisations including as a member of the Committee for Development Policy, the highest advisory body of the United Nations on development. He is also the author of several books, most recently, Edible Economics: A Hungry Economist Explains the World.
Further Reading
Ha-Joon Chang, Kicking Away the Ladder: Development Strategy in Historical Perspective, Anthem Press (2002)
Madison Condon, "Damage Functions (Or why I am mad at economists)", Law & Political Economy Project.
Cedric Durand, "Energy Dilemma", New Left Review: Sidecar.
Steve Keen, "The appallingly bad neoclassical economics of climate change", Globalizations.