The IPCC and the cost of mitigation

Butterflies and moths

The second half of the IPCC’s Fourth Assessment Report has now been released (PDF). Much like the earlier Stern Review, it was intended to assess possibilities for mitigating climate change and the costs associated with them. As with the Stern Review, the conclusion is that the problem can be dealt with at a fairly modest cost. Certainly, the sums in question are much smaller than the costs that would arise if the worst possible consequences of global warming were realized: from large-scale migration, to problems with C3 crops, to widespread agricultural failures (see this article on the ongoing Australian drought). The Economist is calling it “a bargain.”

That the Stern findings and those of the IPCC broadly agree is not at all surprising. After all, the Stern Review was based almost entirely upon the scientific conclusions of previous IPCC reports. Even so, such agreement can only help to foster increased political consensus, both within and between states, that climate change should be and can be dealt with. More than ever, it seems as though we are witnessing the start of a serious progression towards a low-carbon society.

Dealing the the problem of climate change will require unprecedented foresight and cooperation. As such, it is not unreasonable to think that the emergence of the kind of international regime that would be necessary to address it will foster cooperation in other areas. Something like global fisheries management does not have the same level of importance as addressing climate change, but the tools that will need to be developed to sort out the latter may advance our ability to behave more appropriately in relation to the former.

Alternative health care models

On their website, Scientific American has a story comparing the Canadian and American health-care systems. The story suggests that Canadians get better value for money, and may well have a better health system overall, despite spending about half as much per person as Americans do. The article explains that Canadians live longer in general, as well as being less likely to die during the course of treatment.

There is good reason to believe that there could be greater efficiency in a system like those of Canada and Britain, where the federal government is the main purchaser of health products. Unlike individuals – who have limited knowledge about health care and few opportunities to exploit economies of scale – governments can buy intelligently and in big batches. They can make deals with pharmaceutical producers and other suppliers of health products. The importance of scale in the purchase of health products is demonstrated by efforts by groups like the Bill and Melinda Gates Foundation to acquire effective and affordable treatments for the major illnesses of the developing world through the use of large-scale acquisitions. More controversially, central-payer health care systems may be better placed to prioritize who should be treated and to what extent. Spending large amounts of money extending the lives of very sick people contributes less to overall societal health than spending the money on early treatment or preventative medicine, though the relative desirability of the two depends on your philosophical beliefs about how spending should be prioritized. Arguably, the Canadian system also produces fewer conflicts of interest than the American political system, in which health corporations are major campaign donors.

In comparing the two, there is one other major phenomenon that bears considering. Because Americans are the main market for new drugs, forms of surgery, and other types of medical care, it is possible that they are subsidizing research and development which can then be accessed at a lower cost by those outside the United States. One does ocassionally hear accusations that Canadians are ‘free-riding’ on the American system in this way. This is obviously connected to one of the hottest topics of political and legal debate at the moment: intellectual property law. In particular, the ethical questions about who bears the costs and benefits of innovating still only have partial and contingent answers.

It will be interesting to see what the Canadian and British systems look like in twenty-five or thirty years. Managing the ongoing demographic transition will be a challenge – just as it will be with pensions – but it seems as though it will ultimately be beneficial to have a lower birthrate and population. Only once that is true of the world as a whole can we really expect to create a society that is sustainable overall.

Browser considerations

This post, which was linked to on Tony’s blog, got me thinking about web browser choice. All I want is something that displays pages properly without eating too much RAM. Good RSS handling is an advantage. I am likely to stick with Firefox for now, but it is good to assess the state of competition every once in a while.

Continue reading “Browser considerations”

Paris photos II

Centre Georges Pompidou

With its inside-out appearance, the Pompidou Center reminds me of the Lloyds of London building.

Paris street at night

One of the best things about Paris is how there always seem to be people out and about. This was taken at about 1:00am.

Mike Kushnir on a big head

Mike on a big stone head.

Stone head plaza

The plaza containing the head. I almost broke my leg taking this photo, as I had to do it standing inside a fountain. The metal grates at the bottom that seemed firmly fixed actually shifted aside quite easily, plunging you into the shaft under them.

Pont des Arts

A man vaguely resembling Lenin stands on the Pont des Arts.

Nash equilibria and the environment

Panda with guns

While A Beautiful Mind had a good deal to recommend it as a film, the explanation of the Nash Equilibrium that was included leaves a good bit to be desired. The film explained that in a situation with multiple players, a most desirable objective, and many less desirable objectives, it is rational for each player to pursue the less desirable goals. This is because everyone going after the same thing will probably lead to nobody getting it. The strategy of pursuing the less desirable but more plentiful option therefore maximizes the chances of getting some level of payoff, even though it may not be the highest payoff possible in the game.

The essential characteristic of the Nash Equilibrium is similar to that of Pareto Optimality. Basically, both describe situations in which players do not want to change their behaviours unilaterally. Pareto optimality can be most easily be explained by considering a large group of people with items to trade voluntarily. Eventually, they will trade to the point where no more voluntary exchanges will occur. The arrangement may not generate the maximum possible level of utility that could be achieved with the goods in question; for instance, a person with a large stock of insulin would not transfer any to a diabetic who had nothing to trade for it.1 In a Nash Equilibrium, no player would want to change the strategy they are employing, given that no other players are going to change their own strategies. For the equilibrium to exist, this must be true independently from any information they might receive about the strategies of the other players. For instance, learning that other players have certain thresholds beyond which they will behave quite differently might provide an incentive for any one player to alter their strategy.

While Pareto Optimality is mostly a thought experiment, the Nash Equilibrium is directly applicable to many situations in which there are problems of coordination. For example, it can be applied to climate change policy. Assuming that the policy of each state is set independently, there is no incentive for a single state to unilaterally cap emissions. The effect of one country doing so would be small, while the cost in that country would be high. Hence, inaction is a Nash Equilibrium. It is only through the development of a system that changes the strategies of many actors that a low-carbon outcome can be achieved.

The absence of a Nash Equilibrium can also be problematic, when addressing environmental problems. Imagine a conservation regime based around an international ban on the sale of tiger products. From the perspective of any one state, there is an incentive to violate the ban, provided everyone else will maintain their strategy of conservation. The lack of a Nash Equilibrium threatens to make the regime unstable.

While elements can be built directly into such games to encourage cooperation and discourage defection, they always seem likely to encounter these two kinds of problem. As such, it may be that the only way to establish stable environmental regimes that require sacrifice for the common good is to embed them in a larger super-game. Here, defection on one issue threatens the ability of the defecting state to achieve its aims in other areas. States that continue to emit large amounts of greenhouse gas or who undermine conservation regimes might find themselves unable to enter preferential trade arrangements and the like. In a general way, the perception of a state as being a responsible or irresponsible member of the international community imposes some such pressure. To do so more formally requires the prioritization of environmental issues by all governments involved, as well as a certain strength of will in following up such threats. Despite that, it seems more plausible that such a combined approach could yield desirable outcomes, as opposed to one that focuses on narrow issue areas.

[1] This assumes that the participants derive utility only from the objects being traded, and not from higher order phenomena such as the perception that the distribution that exists is desirable or fair. Agents that place some value upon the happiness of the other agents might generate outcomes quite different from the kind envisioned in neoclassical economics.

Paris photos I

Contemporary art in the Louvre

One nice feature of the Louvre is how contemporary art is included in the middle of some of the galleries. Along with these statues, there was a huge polished silver mirror installation in one of the Egyptian galleries.

Marble sculpture in the Louvre

Brass and marble sculptures are my favourite form of visual art.

Painting in the Louvre

It is interesting to watch living artists working from the examples provided by dead and venerated ones.

Napoleon III apartments

Along with art and historical artifacts, the Louvre includes the apartments of Napoleon III. This adds something like a palace tour to the whole experience.

Graffiti near the Louvre

Even the graffiti near the Louvre is none too bad.

Wadham climate change discussion

Today’s Wadham Research Forum on climate change was very interesting, despite how all the ideas expressed were fairly familiar. The extent to which the points highlighted are the same as those in my thesis is both encouraging and dispiriting. It suggests that I have not missed the mark completely, but also that I may not have contributed anything terrible novel. Of course, there is a good chance that the key issues to be considered are obvious enough, and that it is the approaches taken that generate the value of a particular assessment.

An ideal traverse

Paris graffiti

Today’s homecoming was as perfect as could be asked for. Hilary, Mike, and I had an excellent lunch at a vegetarian restaurant. I had never anticipated that blackberry sauce would be so delicious on mashed potatoes and mushrooms. From there, we walked a bit along the Canal Saint-Martin before I picked up a couple of bottles of French wine and was kindly escorted by Mike to the RER train to the airport.

The security people at Charles de Gaulle airport are the most laid-back I can ever recall seeing. They waved me through with about the same level of attention as the guards at the entrance to the Louvre pyramid. EasyJet also deserves praise, for delivering us to Luton a full half-hour early – no mean feat on a light that normally lasts only seventy-five minutes.

At Luton, I had my final stroke of luck. I caught a bus to Oxford just as it was pulling out of the stop and the driver was kind enough to let me aboard. As such, I arrived in Oxford about two hours earlier than planned. I also managed to finish more than half of Barack Obama’s book while traveling – something I had predictably neglected while in Paris.

Many thanks to Hilary for being an excellent and interesting travel companion. I am exceptionally appreciative towards Mike for housing us, feeding us, and spending so much of his own time helping us to have a really interesting and comprehensive Paris experience. As comprehensive as can be attained in four days, that is.

PS. Photos will be appearing online soon. I have learned to put them on Facebook last. Otherwise, everyone looks at the small ugly versions there, rather than the large nice versions that are posted in other places.