Pindyck, EconTalk, Climate Change, and Uncertainty

Russ Roberts recently interviewed Robert Pindyck on EconTalk. I found the interview very fascinating, because it avoids the two extremes that people instinctively gravitate towards: (a) impose a big carbon tax, or (b) do nothing.

He poses the question more narrowly and grapples with the question of "how big should the tax be given the 'real' uncertainties and timescales involved?" Blurb on EconTalk:

Pindyck argues that while there is little doubt about the existence of human-caused global warming via carbon emissions, there is a great deal of doubt about the size of the effects on temperature and the size of the economic impact of warmer climate. This leads to a dilemma for policy-makers over how to proceed. Pindyck suggests that a tax or some form of carbon emission reduction is a good idea as a precautionary measure, despite the uncertainty.

The interview uses his working paper, "Climate Change Policy: What do the Models Tell Us?" (pdf) whose abstract starts with two words that summarize the paper "Very Little."

A more accessible paper is published at the Cato Institute site (pdf), entitled "Pricing Carbon When We Don’t Know the Right Price". Given the political leanings of the Cato Institute the subtitle is even more provocative: "Despite the unknowns, we should begin to tax carbon."