From: baron@cattell.psych.upenn.edu (Jonathan Baron)
Newsgroups: bit.listserv.biosph-l
Subject: book reivew of "Counting the cost of global warming" by Broome
Date: 2 Jan 93 18:48:09 GMT
Organization: University of Pennsylvania

Here is a review I submitted to the newsletter of the Judgment
and Decision Making Society.  I assume that it is OK if I post it
here too.  For what it's worth, I think I agree with Broome's
main conclusions, and I welcome further discussion. - Jon Baron
------------------------------------------------
John Broome (1992).  Counting the cost of global warming.  White
Horse Press (1 Strond, Isle of Harris, PA83 3UD, UK).  Pp.  147.
[pounds] 24.95 hard; [pounds] 9.95 paper.

Practical problems generate new scholarship, which then acquires
a life of its own, until it fails the next test.  The prospect of
global warming is providing economics, philosophy, and psychology
with new problems that will affect these disciplines for decades.
Broome's book is a concise, accessible review of the basic
philosophical (and economic) issues involved in carrying out
cost-benefit analyses of policies for dealing with global warming
(such as computing the optimal carbon tax).  It is also an
excellent introduction to the parts of philosophy that are most
relevant to policy decisions in general, including Broome's own
extensive contributions as well as those of others.  Broome takes
(and defends) the perspective of teleology, the view that
decisions should maximize the amount of good that is done.  (He
elaborates this view in his other recent, but more difficult,
book, Weighing Goods [Blackwell]).

Of primary interest is the effect of current decisions on people
not yet born.  Nonteleogical views - contractualism, rights, and
"rigid egalitarianism" - either fail to speak to the issue or
lead to untenable conclusions.

Much of the book concerns the question of how future benefits of
a project undertaken now should be discounted.  Clearly they
should be discounted for uncertainty.  Beyond that, traditional
cost-benefit analysis discounts the future at prevailing interest
rates.  Broome points out that two different methods are possible
here, and both may be seen as shortcuts to complete estimation of
future good.  One is to discount at interest rate that consumers
get, on the assumption that projects force saving by delaying
consumption.  This rate, however, is likely to be too high,
because it does not sufficiently reflect the consumer preferences
of future people.  The second shortcut is to discount direct
effects at the (higher) interest rate that producers must pay to
borrow, on the assumption that projects will displace investment,
so they must be compared to alternative investments.  But this
rate is not sufficiently sensitive to costs of externalities such
as CO2 emission, because these are not subtracted from the rate
of return on private investment.  Broome then considers and
rejects a number of arguments for discounting, concluding that he
favors the utilitarian assumption of zero discounting of expected
good.

The final chapter concerns the tradeoff between population and
average utility (good).  Here, the same sort of reasoning seems
to lead to the conclusion that total good should be maximized, if
necessary by allowing the population to increase despite
decreasing average utility.  Alternative proposals can be
rejected on the basis of implausible conclusions (e.g., that it
matters when people live, all else constant).  Broome is not
happy with this conclusion, and he allows that some way might be
found out of it, but there the book ends.  This issue and others
will be on the table for a while.

Comments: Gated by NETNEWS@AUVM.AMERICAN.EDU