In the halting, measured language we’ve come to expect from his impromptu public remarks, President Obama posed a core dilemma of climate change yesterday at his first post-election press conference. Explaining the possible repercussions of failing to act now, he said, climate change “is going to have an impact and a cost down the road, if we don’t do something about it.”
Whether to pay for an energy transformation now, or take our chances with climate impacts and costs “down the road,” is a key, polarizing economic question within climate change policy. Another way of framing it is this: What’s the future worth to you?
People alive today and people alive 100 years from now have the same moral value it seems to me and different economic value. That sets up all sorts of trickiness. As economist Richard Tol has put it, placing an even greater economic value on the future than economists do “may be morally preferable but is clearly out of line with common practice.”
Money tends to lose value over time. A dollar today is worth much more than in 2112. We tend to believe that the economy will grow, we’ll all be richer later, the value of a dollar will gradually fall — and with it the cost of adapting to a new climate. It’ll be cheaper to adapt to changes in the future than anticipate them and pay for them with more valuable dollars now.
Part of it is also just human psychology. We live in the present, not the future, so why don’t I just take that dollar now, thank you. As J. Wellington Wimpy — yup, Popeye’s friend — expresses the problem, “I’d gladly pay you Tuesday for a hamburger today.” When he’s staring at a lightly charred, grease-oozing meat patty wedged into a bun, Tuesday sounds as agreeable as anything because it’s practically synonymous with “never.”