Then your SCC is zero, or negative if more CO2 is net beneficial. My own SCC PDF has a about a !% probability of the latter, but anybody who says he knows for sure what the impact of more CO2 is is IMO a fool or a liar. That's why we need to recognize our uncertainty.
Consider my youngest brother, Dick the Denier. His SCC PDF is the same as mine but shifted $50/ton to the left. His most probable SCC is negative $25/ton. He thinks it quite likely that more CO2 is beneficial. But his mean is a positive $136/ton. That fat upper tail means Dick wants insurance against the possibility he is wrong.
Really solid breakdown of why Weitzman's "useless proposition" goes too far. The key insight that fat-tailed densities can still have finite means is crucial. I've wrestled with similar questions around tail risk in fintech and seeing it laid out this clearly helps a ton. The trade-off curve approch makes way more sense than the all-or-nothing framing. One thing that still bugs me is how sensitive optimal policy ends up being to that mean calculation tho.
Here's the great thing about should-cost nuclear. If nuclear is anywhere near its should-cost, very different SCC PDF's can lead to nearly the same grid. See the Alice the Alarmist section in
Alice has a mean SCC of $750 but for should-cost nuclear her optiimal grid is very similar to mine. And as long as nuclear is cheaper that coal as it should be, Dick the Denier's grid will be very similar to mine.
The problem is that as long as we have anything like the current misdirected regualtory system, we won't have anything close to should-cost nuclear. Worry about the regulatory system, not differences in CO2 concern.
ok...that one hurt my head.
What if CO2 emissions don’t matter.
Then your SCC is zero, or negative if more CO2 is net beneficial. My own SCC PDF has a about a !% probability of the latter, but anybody who says he knows for sure what the impact of more CO2 is is IMO a fool or a liar. That's why we need to recognize our uncertainty.
Consider my youngest brother, Dick the Denier. His SCC PDF is the same as mine but shifted $50/ton to the left. His most probable SCC is negative $25/ton. He thinks it quite likely that more CO2 is beneficial. But his mean is a positive $136/ton. That fat upper tail means Dick wants insurance against the possibility he is wrong.
Really solid breakdown of why Weitzman's "useless proposition" goes too far. The key insight that fat-tailed densities can still have finite means is crucial. I've wrestled with similar questions around tail risk in fintech and seeing it laid out this clearly helps a ton. The trade-off curve approch makes way more sense than the all-or-nothing framing. One thing that still bugs me is how sensitive optimal policy ends up being to that mean calculation tho.
AI
Here's the great thing about should-cost nuclear. If nuclear is anywhere near its should-cost, very different SCC PDF's can lead to nearly the same grid. See the Alice the Alarmist section in
https://jackdevanney.substack.com/p/thinking-quantitatively-about-co2
Alice has a mean SCC of $750 but for should-cost nuclear her optiimal grid is very similar to mine. And as long as nuclear is cheaper that coal as it should be, Dick the Denier's grid will be very similar to mine.
The problem is that as long as we have anything like the current misdirected regualtory system, we won't have anything close to should-cost nuclear. Worry about the regulatory system, not differences in CO2 concern.
Hurray, a really self consistent and technically defensible approach to what kind of grid should we build.
Different strokes for different folks.
Love the efficient frontier approach. Congratulations.
Only problem: while technically defensible, its a rare politician that can understand sufficient to make the case to the public.
But, I like it.