John Locke and the Number of Jobs Lost or Created by Climate Change
Discuss about the Climate Change and Valuing the Environment for Global Climate.
Recently climate change has been an issue of concern among economists, scientists, others specialists and the general public. Several research and articles have been published by economists regarding the impact of climate change. Do economic conditions affect public opinion regarding climate change? There have been several perspectives about how environmental attitudes are affected by conditions. Climate change commonly refers to the change in regional or global climate patterns and it is mainly associated with the increase in the carbon dioxide released into the atmosphere due to fossil fuels usage. The public and economics have had their opinions on climate change and valuing the environment. The views given by the economists are important although they might differ in their perspective on the impacts of climate change (Oreskes, 2018, p 35). Economists stand out more of conservative rather than scientists since they mainly focus on the cost of alleviation and the market-driven adaptation. This essay discusses some recent examples of the divergence in views on the impacts of climate change and one stated preference method and one revealed preference method for valuing environmental goods. The perspectives of economists and public give essential insight on the impact of climate change and these perspectives should be looked into despite the differences that may arise.
Let me start by discussing the perspective of John Locke who is a famous economist known for his contribution to global economics. John Locke main view on the impact of climate change was revolving around the number of positive jobs versus the number of negative jobs that are going to be lost or created by climate change specifically climate change policies. John Locke in his views he illustrated that the jobs created by climate change all over the world have the potential of eliminating the negative impact of the jobs lost due to climate change (Hornsey et al, 2016). However, John Whitehead, an ASU economics professor, on a press release titled John Locke gets it wrong: it’s not about jobs the professor distances his department and himself from John Locke report. In his perspectives, he portrays the damages avoided as the benefits of climate change. Professor Whitehead believes jobs are not included in a benefit-cost analysis and that they are macroeconomic issues (Carleton and Hsiang, 2016). Therefore, microeconomic and environmental policies have a virtually nil net effect. John Locke views on the impact of climate change saw the possibility of positive benefits while Professor Whitehead had a different opinion.
Adam Smith is one of the famous economists who shared their views on the impact of climate change. Adam Smith through his organization, Adam Smith International, gave a development- focused attitude to climate change. Climate change is a threat to the survival of vulnerable and poorest people in the world. Climate change is a big challenge as it hinders the growth of economies in 3rd World Countries which are struggling to improve agriculture so that they can feed their swelling population (Boserup, 2017). The development-focused approach aims at transforming livelihoods in developing countries in an attempt to respond to the impact of climate change. The approach focuses on educating poor communities that depend on natural resources and agriculture to adapt to climate changes quickly (Nelson et al, 2014). Governments and states are encouraged to encourage the use of renewable sources of energy to supplement the exhausted natural energy sources (Intergovernmental Panel on Climate Change, 2015). The organization believes that building water infrastructure so that it withstands climate change impacts, therefore, enabling a lasting economic growth. Smith and his organization believe that the impact of climate change is slowing the growth of economies, especially in the developing countries.
Adam Smith’s Development-Focused Approach to Climate Change
The public population also has an opinion concerning their beliefs and attitudes on economics and science of climate change with global warming being the main point of focus. The individual opinion is influenced by a number of factors such as geographic region, ideology, demographics, political identification, education and individual risk assessment (Wise et al, 2014). The public opinions have an influence on the policy made by the government that regulates the economy of a country (Moore and Diaz, 2015). For instance the public belief and attitude towards carbon emission me compel the government to establish and implement policies that regulate carbon emission despite of the negative economic implication such policies might have. Climatic change has created anxiety among the public and the public has a negative attitude towards the impact caused especially global warming (Smith et al, 2016). According to a survey conducted in the United States shows that fifty percent of the adult population believes that climate change is caused by human activities, 23% think that natural earth’s environmental patterns are causing climate change while 25% of the population do don’t believe the earth is warming up. The public opinion on the impact of climate change varies from one individual to another and these opinions cannot be relied on since they are not proven.
Understanding the concept of values of environmental goods is important in valuing the environment. There are two types of values namely non-use value and use value (Freeman III, Herriges and Kling, 2014). Use value entails the utility or satisfaction obtained by consumers when through direct consumption of goods. Use value may comprise current use, expected use and possible use when it comes to the case of environmental goods. The value placed on a future ability to use the environment is known as option value. Non-use value refers to the utility gained by an individual without consuming the good directly. Non-use value is classified into Bequest value, Existence value and Altruistic vale. We need to value the environment because there is no price data for non-marketed environmental goods. We also need information to give guidelines on compensation guidelines for victims as well as information to help assess the benefits of conserving the environment and this will help in policymaking.
Stated Preference Method is also known as Contingent valuation (CV) and for more than thirty years the technique has been used by economists to value changes in the environment and natural resources. Conjoint analysis is applied in representing the individual judgment of multi-attribute incentives (Khaw et al, 2015). The experimental analysis of choice is the conjoint analysis type we focus on since it is parallel to Random Utility Model (RUM). The first step of stated preference is the identification of the set of attributes followed by the selection of the measurement unit of an individual attribute. The third step is specifying the number and magnitude of attribute levels followed by experimental design. The fifth step is surveying instrument design followed by model estimation. The final step is using the parameters to simulate choice. The method is appropriate for evaluating environmental resources. The method has disadvantages which include hypothetical bias, strategic bias and question framing biases (Loomis, 2014). The technique may answers that are poorly thought or misleading believing it to be hypothetical.
The Influence of Public Opinion on Climate Change Policy
Revealed Preference Methods are meant to document the actual behavior of individuals empirically compared to the hypothetical as in stated preference method. There are several revealed preference methods including hedonic pricing methods and travel cost models. I choose to discuss the Hedonic Pricing Methods. This evaluation technique involves looking the market pricing trends across several geographic locations and inferring the quantities of environmental goods that are found in the different locations (Rakotonarivo, Schaafsma and Hockley, 2016). The difference housing markets are compared then deduce how the price differentials are affected by the differences in environmental attributes (Kahn, 2017, p 50). This valuation technique is very appropriate for valuation of environmental quality such as noise, air pollution or water pollution. An example application of this technique is that people are willing to pay more for a house that is located in a neighborhood that offers environmental benefits.
Revealed Preference Methods have several advantages as well as some few disadvantages. One advantage is the fact that the methods are appealing to economists since the techniques rely on observed and actual market behaviors. Secondly, the values these techniques produce are readily accepted by economists since they are very useful for making environmental policies. The techniques also come with a number of limitations too. The first limitation is the inability to estimate non-use values. Secondly, the estimated values depend on technical assumptions that are drawn from the relationship between surrogate market good and the non-market good to be valued (Neuteleers and Engelen, 2015). The other limitation is the fact that the estimated monetary value of non-market ecosystem services is prone to distortion due to policy failure or market imperfections.
In conclusion, climate change has several impacts on the economy and society at large. Various experts and economists have different views regarding the impact of climate change. Climate change is mainly associated with the burning of fossil fuels and it has a huge economic impact in developing countries. Environmental valuation is also important and they are various methods that can be applied to value environmental goods. The two main valuation methods are Stated Preference Methods and the Revealed Preference Methods that are further subdivided into other techniques. The valuation techniques have advantages as well as limitations in their implementation. The impact of climate change plays a critical role in determining the nature and growth of economies all over the world.
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Wise, R.M., Fazey, I., Smith, M.S., Park, S.E., Eakin, H.C., Van Garderen, E.A. and Campbell, B., 2014. Reconceptualising adaptation to climate change as part of pathways of change and response. Global Environmental Change, 28, pp.325-336.
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