The Importance of Global Extinction in Climate Change Policy
| Date | 01 September 2016 |
| Author | Yew‐Kwang Ng |
| Published date | 01 September 2016 |
| DOI | http://doi.org/10.1111/1758-5899.12318 |
The Importance of Global Extinction in Climate
Change Policy
Yew-Kwang Ng
Nanyang Technological University
Abstract
For problems like global climate change that may involve global extinction, we must not just focus, as most economic analysts
do, on the trading-off of current consumption (current mitigation investment reduces consumption) against future consumption
(less need for future investment), but also consider the effects of mitigation investment in reducing the extinction probabilities.
Future utility/welfare values should only be discounted at the uncertainty of their realization, making these values even in the
far future important as this discount rate should be very low (0.01 per cent per annum or less). Immediate and strong actions
of environmental protection including greenhouse gas reduction may thus be justified despite high consumption discount rates
(about 5 per cent). Unexpectedly, an increase in the extinction probabilities may increase or decrease our willingness to reduce
them; precise conditions are given. The related intuition that, the higher the probability of destruction of your house by fire,
the less willing you will be in investing on things like interior decoration that does not change the probability of destruction,
but the higher your willingness to pave a fire clearance that does reduce the probability of destruction, is examined.
Policy Implications
•For problems like global climate change that may involve global extinction, we must not just focus, as most economic
analysts do, on the trading-off of current consumption (current mitigation investment reduces consumption) against future
consumption (less need for future investment), but also consider the effects of mitigation investment in reducing the
extinction probabilities.
•Future welfare values should be discounted at very low rates of discount, providing very strong support for immediate
and strong actions at global environmental protection in general and in climate change policy in particular.
•Immediate and strong actions of environmental protection including greenhouse gas reduction may thus be justified
despite high consumption discount rates.
•An increase in the global extinction probabilities may increase or decrease our willingness to reduce them.
The Royal Society of the UK announced in 2006 that man-
made global climate change is as certain as evolution and
gravity. Hundreds of top American scientists (members of
the US National Academy of Sciences), in an open letter on
‘Climate Change and the Integrity of Science’published on
7 May 2010 in Science,affirmed that ‘There is compelling,
comprehensive, and consistent objective evidence that
humans are changing the climate in ways that threaten our
societies and the ecosystems on which we depend‘and that
this falls within the category of ‘well-established theories’
(pp. 689–690) ... often spoken of as ‘facts’. Commonwealth
Scientific and Industrial Research Organisation (CSIRO) and
the Australian Bureau of Meteorology (2012, 2014) provided
an updated summary of long-term climate trends that ‘the
long-term warming trend has not changed, with each dec-
ade having been warmer than the previous decade since
the 1950s’(p. 2) and confirmed that ‘The main cause of the
observed increase in CO
2
concentration in the atmosphere
is the combustion of fossil fuels since the industrial revolu-
tion’(p. 8). Due to the possible existence of tipping points
and cascading effects, many environmental scientists are
seriously worried about the possible outcomes of the
destruction of the whole global living environment, entailing
the global extinction of mankind and other species on earth
under the business-as-usual policy (e.g. Schneider, 2009,
Sherwood & Huber, 2010).
This paper argues that:
•For issues where we may reduce the probabilities of glo-
bal extinction, the benefits of doing so may overwhelm
those of safeguarding future consumption focused by
most analysts (section 2).
•This is particularly so because reducing extinction proba-
bilities directly increases expected utility/welfare and
because even distant future utilities are important as they
should only be discounted by the uncertainty of their
realization (at 0.01 per cent per annum or less), while dis-
tant future consumption may be far less important as it
should be subject to the additional discount rate on
future economic values (section 1).
•Thus, strong and immediate actions on global environ-
mental protection including climate change mitigation
Global Policy (2016) 7:3 doi: 10.1111/1758-5899.12318 ©2016 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 7 . Issue 3 . September 2016 315
Research Article
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