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The Problem With Economic Climate Models

They exert influence because they oversimplify—and they oversimplify by leaving out basic human concerns.
economic climate models

(Image: Meryll/Shutterstock)

As a college student, I once heard a joke about the difference between business and economics. The punchline—one discipline exploits people, the other ignores them—inspired laughter, especially among humanities students, but it also reveals a serious problem in how we’re discussing climate change.

An economic study published in Nature in October predicts that climate change will cause serious damage to the global economy, especially in African and South American countries where average temperatures have already surpassed the "economic drop zone." The paper inspired some alarmist headlines ("No one works when it’s hot, so climate change is going to ruin the economy," one read) and it sparked renewed calls for action at this month’s COP21 climate conference in Paris.

Of course, economic studies like this one often draw a spotlight. Big, flashy numbers remain appealing to journalists and activists, and, within the social sciences, economics enjoys by far the most credibility in public-policy circles. It’s all part of what sociologist Marion Fourcade has critically dubbed the "superiority of economists," but Mark Carey, an environmental historian at the University of Oregon and author of In the Shadow of Melting Glaciers, warns that, despite the hype, the predictive models used by economists aren’t actually all that good at predicting the future—largely because they ignore humans.

“If we focus on degrees Celsius and parts per million of carbon, it rather conveniently lets us wash our hands of a long history of inequality and racism that has driven these discrepancies in the world.”

"These models often hold society as static, and they don’t fully account for human ingenuity and what can change in the future," Carey says. "I’m not one of these people who says, ‘Who cares about global warming; technology will save us.’ But I do think people are inventive, and societies change."

Carey is hardly skeptical about climate change or its catastrophic impacts: In the book, he documents (among other things) how melting glaciers have contributed to more than 20,000 deaths in Peru. But Carey also cites Peru as a fitting example of what gets missed by economic climate models. Despite the retreating glaciers and declining water flows, the country’s Andean communities are actually using more water these days, not less, thanks in large part to human adaptation and social investment. With economic climate models now predicting costly water shortages in the future, Carey says that history provides grounds for reasoned skepticism.

"People there are building new reservoirs, they’re adding turbines to the hydroelectric facilities, they’re building new irrigation canals to move water differently," Carey says. "Despite the more deterministic models, there is not a direct connection between amount of glacier runoff and amount of water use. They are independent of each other."

Researchers like Carey and Mike Hulme, a professor of climate and culture at King’s College London, support a more holistic approach to studying climate change and global economies. As Hulme explains in a 2011 paper in Osiris, today’s "climate reductionism" has historical parallels in early 20th-century environmental determinism, a pattern of thought whereby many scientists touted climate as the central determining factor in human physiology and psychology—an ideology used to support bigoted readings of racial difference, and to support a philosophy of white supremacy.

That scientific paradigm eventually fell out of favor, but Hulme argues that today’s climate reductionism emulates many of the mistakes of its forebear, reducing complex cultural, social, and political phenomena into a future determined strictly by climate. "In this new mood of climate-driven destiny," he writes, "the human hand of climate change has replaced the divine hand of God as being responsible for the collapse of civilizations, for visitations of extreme weather, and for determining the new twenty-first century wealth of nations."

Meanwhile, despite Hulme’s warning, the scientific community has often not been kind to those who challenge the narrative of a climate-driven future. In 2014, when Roger Pielke Jr. wrote that natural disasters are becoming more costly because of rising global wealth, as opposed to climate change, he set off a firestorm of public backlash, including a campaign to get him fired from his post at FiveThirtyEight.

While some critics outlined thoughtful rebuttals to Pielke’s analysis, much of the outcry seemed to embody a reflexive distrust of any argument that complicates our basic notions about the role of climate in society’s future—an instinct that Carey believes is flawed. When complex socio-political conditions—take wealth disparities between the northern hemisphere and the global south—get reduced to a function of climate, he says, other forces that drive economic inequality are pushed out of view.

"There’s inequality in trade, there’s inequality in labor, there’s inequality in the policies that benefit multinational companies," Carey explains. "If we focus on degrees Celsius and parts per million of carbon, it rather conveniently lets us wash our hands of a long history of inequality and racism that has driven these discrepancies in the world."

So is economic climate modeling a big waste of time? Carey doesn’t think so. But he suggests that policymakers, journalists, and the public start taking its results with a grain of salt. "I think the economists recognize that their predictive models have limitations," he says, "but the studies don’t get picked up just as heuristic tools. They’re actually influencing policy, and that’s where it can get problematic."


"Catastrophic Consequences of Climate Change" is Pacific Standard's year-long investigation into the devastating effects of climate change—and how scholars, legislators, and citizen-activists can help stave off its most dire consequences.