Ethics in Climate Economics: Balance or Bias?

Abstract

This chapter aims to analyse the normative-ethical assumptions implied in the structure and scenarios of integrated assessment models (IAMs), as well as the IAM-based studies used in the recent assessments by the Intergovernmental Panel on Climate Change (IPCC). This will be done according to the framework developed in Sect. 7.3 which claims transparency and balance. I focus particularly on aspects related to objective functions in IAMs, i.e., on welfare economic issues. Section 8.1 discusses the predominant views of the relationship between welfare economics, ethics and values. Since these views have a considerable impact on the welfare economic assumptions of IAMs, one should be aware of them. Then, some fundamental assumptions of mainstream economics underlying welfare economics – i.e., the assumed rationality of agents in markets – are examined (Sect. 8.2). Based on that, the more specific analysis of IAMs regarding welfare issues can be undertaken (Sect. 8.3). Moreover, Sect. 8.4 briefly discusses other ethically interesting aspects of IAMs that serve as additional examples of the value-laden IAM economics of climate change. It is concluded that at least some disputable ethical value judgements in IAM-based studies are still relatively opaque and one-sided – which makes life more difficult for the authors of assessment reports (Sect. 8.5).