Reflections on the Economics - Essay Example

DETAILED SUMMARY OF THE ARTICLE The article starts almost with a bang due to presence of Einstein quote of universe, which compares the urgency required for environmental conditions created by man. The author mentions seriousness of the issue by mentioning the example of "dice" as a bitter reality, yet completely ignored by the mankind. The second line directly mentions without much ado, what are the main environmental problems. The writer mentions all the main issues one by one, so that the readers should know the objective of the article. Unlike normal writers, who address the whole humanity, he is addressing only the scientists, who according to the author are more knowledgeable. He emphasis the importance of "global change" and the "threat of green house warming" which is taking place at a rapid speed all over the world. The approach is ideal because instead of jumping to conclusion, he explores the issue of green house warming and its impact on the world. The "Green house effect" part is given more space than required, which could have been avoided, as writing two paragraphs just to define the Green House effect is too much, especially if the audience are scientists, and are knowledgeable about the topic. Even the second paragraph seems a bit out of space, the better approach would have to combine two paragraphs, into one paragraph and add only the importance part relevant to the topic, such as "concentration of CO2" in the atmosphere. The figure1" projection of global temperature increase" is an excellent way to show the scale of the problem; the readers can easily see scale of the problem. The figure shows two hundred years change (1900 to 2100), which is enough time to see the visible changes in the climate. It clearly shows, how the temperature has increased over the time and how much it will further increase. However he counters the argument of dooms day prediction with his own model and mentions that it is not exactly possible to predict the climatic conditions as the scientists have claimed in their model. The reason he mentions is that climatic model depends on economic models, and slower economies and higher fuel prices will decrease the emission of gases in the atmosphere. And another reason against the climatic catastrophe is that "climate flips from one locally stable equilibrium to another" and it is not possible for climatologist at present to exactly predict what will happen, unless they come up with bigger and exhaustive models. The writer moves to "Impacts of the Climate Change" and mentions that two centuries ago man was highly dependent on day and light timing, but technology has changed he slavery to natural timing and now man is no longer dependent for his economic and agricultural needs upon natural environment. He provides solid arguments by mentioning the case of a business firm which wish to start business is not concerned about climate, even if the difference is as great as Moscow and Hong Kong (Moscow has an extreme cold temperature, while Hong Kong is an island and has mild temperature). The contrast is purposely mentioned to give the readers an idea of difference in temperature and making a business decision (Economic activity). The reason for such change is technology, which has enabled man to overcome the climatic difference and work in all kind of environments. He brings another arguments against the impact of climatic change, by mentioning the factors, such as precipitation, draughts, and natural disasters, which often have "socioeconomic impact" yet ignored by scientists. Normally scientists mention only temperature as a main factor to be influenced by climate for the reason that it is an easy way to refer to the climatic change. In reality this approach is flawed and more generic and is ignoring the impact of climate on the less developed countries of the world. Thus the conclusion is that the climatic prediction does not portray a full picture of the problem nor does it provide sufficient information as predicted by the scientists. The author does not deny the existence of climatic impact, but he mentions that it would have "Different impact on different sectors" with reference to economy. For example the sectors that are dependent on ecosystem and forestation will feel the pinch. While the countries, such as US and Japan are "insulated from such disaster" as these economies are not dependent on agriculture. However, the author has ignored one fact, which is that even developing countries, such as India, China and Vietnam are leaving their legacy of agricultural economies behind. India since 1993 has moved forward from agriculture based economy to IT and manufacturing. Similarly China and Vietnam are also not different and are growing fast; their growth rate for 2006 is predicted at 9.1 and 7.1 respectively. Today India and China are considered engine of the world along with US and Japan. Any slow down in these economies can slow down the world economy. Perhaps the writer at that time did not realize that economic structure could change very quickly in a globalized world. These kind of problem may exist in much more less developed countries in Africa, but we can still see the draughts and disasters shaking poor African countries economies. Even the case of US insulation is not accurate, a few recent examples are Katrina and Wilma, which shook the US economy and infrastructure upside down, showing the un-preparedness of US for any natural disaster. Even there were predictions before Katrina as author mentioned that warning could save, but the US administration could do little and the city upon city drowned in sea, killing thousands of people and bringing billions of dollars in damages. The Cline model is interesting even though the author has tried to minimize the impact of change, but in reality global warming is bringing sudden and catastrophic change. Some changes are abrupt and sudden which give rise to crisis of Biblical scale. One such case was Tsunami in 2004, which put a dozen of countries in severe crisis. We can say that the three studies mentioned in the table 1 (Estimates of Global Warming) are accurate, or even much lower then the disaster scale. The world has seen the devastating impact of two storms, which were sudden and created unthinkable uncertainty. In fact they happened at such a scale that even US requested for help, despite being the strongest country in the world. The writer approach is innovative in the "balancing act in climate change policies" section, where instead of looking at harm, he is looking at the positive side, as how emission can help in creating economic policies to create the balance. He also talks about alternative approaches to cut down the emissions. After discussion all the approaches, the crux of the matter which he mentioned is adopting" cost effective polices" which according to him can truly help in over coming the problem. The benefits has been mentioned in the figure 2, however the table is not that much helpful to understand the approach. The author is very original in the "modeling of optimal policies", where he purposes a model "DICE", a unique approach to "calculate the optimal path" .The figure three "carbon taxes for three policies" is quite helpful to have a quick glimpse of over all proposal. The point raised in "uncertainties and anxieties" section is right in a way that, normally the environmentalists portray a steady increase in climate, which according to figure 1 will reach a highest point and as a result this approach ask for full hand tie approach, which perhaps is not possible, especially for the developed countries who are highly dependent on energy and power. What the author in fact proposes is s shift from traditional approach. The author has instead proposed a balanced approach, which asks for gradual approach to create a balance between economies and climatic change. He also criticizes the doomsday scenario predications, such as conversion of Europe into Alaska, conversion of green belts into deserts, all of these do not have scientific proof, therefore he consider it more judgmental approach rather than a scientific one. He emphasizes that any climatic policy should be based not mere on uncertainties and fears, but before making any important decision related to climate, it is fundamental to have full information, rather beating the drum of uncertainty on the basis of half-baked information. This responsibility falls on the shoulder of scientist to understand the phenomenon and conduct further research. Instead of talking of possibilities and probabilities, they should get more information and need to have a clear picture to apply a realistic solution. And in the end it is the leaders responsibility to create this balance between cost and catastrophe and solve the problem. The Article Findings and Over all Approach The article title is appropriate and reflects the matter under discussion. The article starts with a detailed introduction of the topic and allows the reader to have full idea of the topic. In the beginning the reader feels perhaps the writer will also end up in presenting the dooms day scenario. However, the writer style is innovative and has many twists and turn throughout the article, which keeps the reader interest till the end. There are some unnecessary data presented in the introduction part about the CO2 emission, which could have been omitted, however as he moves forward things seems more clearer. The author has criticized the figure 1 projection (as shown below) with an argument that it is an approach of steady increase. However, if we observe the table below carefully, it is clear that climate is warming and changing as shown in the figure and the prophecy seems to be fulfilling. Looking at the graph (in figure 1), it can be clearly seen that from 1900 or even 1950 to 2000, the temperature is rising up. The author approach about the climate seems a bit relaxed, while scientists worry is not without reason after looking at the projection and observing the current situation in the world. However, the scientists approach is too linear and depicted in a straight line, especially the portrayal of doomsday scenario is rightly criticized by the author. The author is also wrong about mentioning the in-sufficient information. The basic thing is that there are enough clear and visible signs in the current environmental scenario, which if not taken seriously can cause serious damage as he mentioned in the beginning. No matter how much information the scientists have, at the end of day, no one can 101 percent predict future with certainty. The impact of Global warming table is quite old and perhaps underestimated which according to the author is overestimation- is far from true. For example according to Forbes the total damage assessment for Ktrania alone is about $40 billion, including $26 billion covered by insurance--the largest payout ever in US history. Other than that the area minced by the storm employed 1.6 million people, who produced services worth US$130 billion, plus the cargo passing through the region also valued at $150 billion. If we add up the total calculation only one storm Katrina cost reaches to $320 billion, which is six times more than the estimated 50 billion cost. Ironically the author considers even the $50 billion an over estimate. One reason for this approach seems to be calmness found in 1980s and 1990s. At the time of projection no one realized that there can a great and sudden catastrophe beyond imagination. Conclusion However the concluding remarks by the author in last section are encouraging. The view is optimistic view and is meant to create a balance between economics and preventive measure. This approach means that neither too much judgmental approach is accurate way of dealing with this problem nor becoming heedless from the problem is also not advisable. The author asks scientists to become more rational in dealing with crisis and strike a balance between two extremes. On one side, some scientists ask to tie hands and stop the economic progress, while other advocate progress at cost of destroying the environment. The article over all is balanced and well written and shows the grasp of author from a different perspective. Reference William D. Nordhaus (1993),Reflections on the Economics, Journal of economics prespective Forbes; Katrina's Impact Is Spreading http://www.forbes.com/economy/2005/08/31/katrina-hurricane-impact-cx_sr_0831impact.html Read More