Time, Discounting and Value.

A team of over 60 of the world's leading economists is currently attempting to establish if humankind can afford to halt global warming and prevent a climatic catastrophe. The team, Working Group III of the Intergovernmental Panel on Climate Change (IPCC), is comparing the costs and benefits of six ways of responding to global warming so that national governments can choose between them. These scenarios range from "business as usual" -- allowing the level of greenhouse gas emissions to be determined by unfettered market forces -- to reducing human-made emissions so that the atmospheric concentration of greenhouse gases stabilizes.

Cost-benefit analysis (CBA), however, is completely inadequate for the task. To succeed, it would have to estimate all the consequences of all six scenarios, including the specific years in the future in which they will occur and their impact in cash terms. This is a ridiculous calculation to attempt, not least because …