Economics, Ethics and Climate Change

Abstract

Climate change raises challenging questions in the economics of risk, space, time and in broader aspects of human well-being. Many of these are normative questions, which cannot be addressed without engaging with difficult ethical issues. The relationship between economics and ethics cuts both ways: careful, explicit examination of the ethical issues can guide the formulation of relevant economic questions, and economic analysis can provide guidance on ethical issues by clarifying the consequences of particular ethical viewpoints. Climate change demands that a number of ethical perspectives be considered. Welfare economics is just one perspective, and the standard 'workhorse' model, while powerful, has a particularly restrictive structure. Furthermore, it is not enough to simply presume that existing markets can provide a technocratic solution to questions of intergenerational justice. Coherent analysis requires the integration of economics with moral and political philosophy, a theme in much of Amartya Sen's work.

Keywords: change, discounting, ethics, intergenerational equity, risk

JEL Classification: D61, D63, Q01, Q54