An intergenerationally fair path towards 2 °C

Abstract

In this paper, we argue that important questions of the intergenerational distribution of the costs of climate change remain even if a temperature target 2 °C is assumed because the target can be pursued in ways that assign costs differently across generations. Moreover, the discounted utilitarian approach that is standard in the economics literature is suspect in light of an a priori argument about its fairness. We also compare the results of modeling Nordhaus's version of discounted utilitarianism, constrained by a 2-degree warming parameter, with a similarly constrained version of a principle that requires minimizing the accumalted differences in the burdens of climate change costs across generations. The model comparison demonstrates that the a priori worry about discounted utilitarianism is largely born out. Nordhaus's version of discounted utilitarianism assigns poorer generations a heavier burden because it is optimific to do so. These arguments call into question the tremendous credibility that discounted utilitarianism enjoys in climate policy. The most important policy implication of the paper is that in order to pursue a fair path towards limiting warming to 2 °C, policy should be directed to increasing the price of carbon over the short term significantly more than what is called for by Nordhaus's model.