Books

Ten Expert Economists' Wild Guesses About the World of 2114


We don’t know what’s going to happen 15 minutes from now, so it seems like an exercise in science fiction to predict what the world will look like in a century. That hasn’t stopped 10 economists who were invited to contribute essays to a new book called In 100 Years: Leading Economists Predict the Future, edited by Ignacio Palacios-Huerta of the London School of Economics. As one of the 10 essayists, Avinash Dixit, noted, “I will not be around to be ridiculed when my predictions go spectacularly wrong.”

Where a book like In 100 Years is most useful is in the one arena for which a century-ahead forecast is valuable, even necessary. That’s climate change. Companies, nations, and reality TV stars will rise and fall over the coming decades, but one thing is certain: Unless greenhouse gas emissions suddenly decline, the world will be considerably hotter in 2114. (Actually 2113, since the essays were completed last year.) In a collection that ranges all over the world, global warming is the one theme that all 10 essayists grapple with.

For the pessimists in the group, climate change is the coup de grâce. For the optimists, it’s the caveat. In the final essay in the book, it’s the sole subject. The 10th author dwells on a solution that’s cheap and easy—maybe, he fears, too cheap and easy. Here, then, is a quick review of who the economists are and what they say about an issue that is likely to preoccupy scientists, policymakers, and the public for the coming century.

Daron Acemoglu, Massachusetts Institute of Technology
In the book’s longest and most chart-filled essay, Acemoglu speculates that global warming can be solved by a motivated citizenry. He predicts that the “rights revolution” of the past several decades will continue, empowering ordinary people to demand more of their leaders. He acknowledges, “Our track record so far does not inspire confidence.” But he writes, “the rights revolution, if it does indeed continue to spread, will also tend to make people care more about the welfare of those who will suffer because of our unwillingness to take action against climate change.”

Angus Deaton, Princeton University
Deaton starts by writing that “unregulated climate change is a new and enormous danger” and concludes on a pessimistic note: “Perhaps there will have to be great suffering and destruction before people come together to make changes.”

Avinash Dixit, Princeton University
Dixit’s is the most playful essay in the book, with a teasing line about how the International Monetary Fund, operating from “shiny new headquarters in Singapore,” will make loans to over-indebted and overspending Americans who “insist on their constitutional right to enjoy all the latest new imported personal helicopters.” He says reaching international agreement on climate change “will remain problematic,” but notes “some side benefits” from warming, including the opening of shipping channels through the Arctic Ocean.

Edward Glaeser, Harvard University
In keeping with his faith in free markets, Glaeser judges global warming to be a dangerous but solvable problem. Saying that climate change would “make extreme events more likely and increase sea levels generally,” he continues: “… while such disasters may cause great harm, historically these events have been localized and limited in their long-run impact.” He adds later that “the vast size of the world and its geographic diversity limit the potential impact of long-term climate change,” noting that “vast amounts of land in Canada and Siberia” could be farmed more intensively if temperatures were higher.

Andreu Mas-Colell, Pompeu Fabra University, Barcelona
The most optimistic essay in the volume predicts that a century from now “we will have managed, due to the combination of natural growth and deliberate action, to completely eliminate poverty in the world.” Not only that, but “work will be more interesting,” Mas-Colell writes. He says that recent research has shown “the enormous adaptability of human beings.”Speaking of a wide variety of potential changes, Mas-Colell predicts that if things change gradually “we will adapt to the new situation in a natural and almost imperceptible manner.” Looking 200 years ahead, not just 100 (the chutzpah!), he writes that future troubles are more likely to be biological or social in origin (wars and conflicts) than from environmental, energy, or economic causes.

John Roemer, Yale University
The angriest essay portrays global warming as a political problem and puts the blame in the U.S. on the Republican Party, accusing it of an “opportunistic and ignorant approach to the problem.” Roemer says that in order to meet the twin goals of curbing global warming and reducing international wealth disparities, the rich nations will have to accept an increase in their incomes of only about 1 percent a year over the coming century.

Alvin Roth, Stanford University
Roth, who won a Nobel Prize for his work on market design, gives the least attention to global warming of any essayist. Climate change appears obliquely in parentheses in an otherwise optimistic sentence, to wit: “To set the stage, I think the biggest trend of future history (if it is not disrupted by environmental catastrophe, or descent into widespread terrorism, or warfare with weapons of mass destruction) is that the world economy will continue to grow and become more connected.”

Robert Shiller, Yale University
Shiller, also a Nobelist, looks at global warming through the lens of insurance against risks, one of his pet topics. Citing others’ work, he says that what society needs is long-term insurance that “protects homeowners against rising insurance premia because of long-term changes in environmental risks.” In other words, insurance on the cost of insurance. He predicts the product will become available despite the current “narrow-mindedness of regulators.”

Robert Solow, Massachusetts Institute of Technology
Solow, the third Nobel Prize winner in a row in this star-studded book, is a veteran essayist with nearly 20 bylines in the New York Review of Books. But he doesn’t use poetic license to make extravagant predictions. He writes, “Show me an economist with a strong opinion about these things, and I will show you that oxymoron: a daredevil economist.” On that note, he’s a bit vague and terse on global warming. Speaking more generally of the environment, he writes, “No one can know with any precision how many people can be supported in the world at a standard of living anything like that of the currently advanced countries.”

Martin Weitzman, Harvard University
There’s a reason this article focuses on the authors’ views about global warming, and Weitzman states it clearly in the first sentence of the concluding essay: “If there is one genuinely natural bridge spanning the chasm between now and a century from now, I think it is climate change.” Weitzman writes that some time in the coming century “the temptation may become very great for some medium-developed nation feeling itself under climate change siege to unilaterally geoengineer itself (and the planet) out of high temperatures by seeding the stratosphere with sunshine-reflecting particles because it is so extraordinarily cheap.” As Weitzman writes, putting up a sun screen in the sky wouldn’t solve all of the problems caused by greenhouse gases—such as ocean acidification, which kills coral reefs—and it could have dangerous side effects. But if the world doesn’t do the right thing and curb emissions, the geoengineering quick fix will become “extremely tempting for any country feeling especially hard pressed by what it perceives as an intolerable threat to its own well-being.” For that reason alone, the option deserves serious study, Weitzman says: “Is it not prudent to simultaneously lobby for the best and prepare for the worst?”

Coy_190
Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.

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