Recently, the New York Times reported that a huge number of people attended an outdoor political rally in India in the midst of high heat. More than a dozen people subsequently died. The New York Times reporter argues that the heat caused these deaths. I want to explore this theme in this entry. Here is a direct quote;
These two paragraphs from the New York Times convey several themes. One relates to a key idea from behavioral economics that people are unaware of the risks they face in daily life. A second theme is that the elites have a better deal than the “Average Joe”. The elites were in the shade while their fans sat out in the hot sun.
This real world case highlights a salient example of the “climate damage function”. In the aftermath of high heat exposure, some members of the crowd died. A statistician might wonder if this was a fluke. If a million people read one of my books, it is likely that one will die in the next week. It would be cruel to tell the author that his book killed the person who read it.
Let’s assume that the heat exposure did raise the vulnerable’s mortality risk. The climate change adaptation agenda seeks to use microeconomic incentives to “flatten” this damage function. The New York Times posits that Indian people do not know their own susceptibility to the heat. To an economist, this is a claim that people do not understand production functions. People want to be healthy and they want to listen to Indian politicians talk. The New York Times argues that there is a tradeoff here that when Indian politicians give a speech on a very hot day that exposed people will sacrifice some health for hearing the talk.
A theme in my ongoing research is that this “tradeoff” is constantly shrinking. Capitalism supplies products that people want. If Indian people are growing richer and are aware of their susceptibility to the heat, the market forces will produce products to help them to adapt (fans, clothes, enriched water etc). Capitalism helps to attenuate this ugly tradeoff.
For those who are susceptible to heat, they can watch a YouTube video of the speech rather than hearing it live. More and more Indian people have a Cell Phone.
The key here to start this optimistic process is for those who want to be healthy to be aware of how good health is produced during a time when the climate is changing. Firms that want to sell adaptation products have an incentive to market them to people. “Do Gooders” who want to reduce the probability of future deaths from political rallies have an incentive to spread the word about the health costs of heat exposure.
In this video, I discuss how academic research helps to accelerate the climate adaptation process as we educate the public about the hidden effects of extreme weather exposure.
The recent deaths at the political rally are a tragedy but what does the New York Times mean when its reporter uses the words “deceptively dangerous”. Is the reporter implicitly insulting Indian people? I believe that self interested individuals have an incentive to learn about the new risks we face due to climate change. Once they are up to date about these risks, they will use markets and political pressure to help them to adapt to the specific risks that their families faces. We are not “passive victims” here. If more people realize that they face physical risks from climate change, then this creates a huge innovation market that helps to flatten the climate damage function. This is the theme of my 2021 Yale Press book Adapting to Climate Change.
The New York Times continues to fully embrace behavioral economics and to dismiss the ability of individuals to invest in their health and their future and to collectively unleash capitalism to help to protect us.
Ultimately, economics is an empirical social science. A prediction from my research is that each subsequent heat wave causes less damage to our health as we learn about the risks we face and we go to dynamic markets to buy products that help to protect us. Of course, the poor have less purchasing power here but even they enjoy an ever growing menu of adaptation products because of the capitalism’s innovation. Could Thomas Jefferson afford a cell phone in 1776? Today, hundreds of millions of people in India own and use it to inform them about daily life.
A final point. I titled this piece “Self Awareness”. We are better able to adapt to a “known unknown” such as high heat if we stay humble. We must acknowledge that we face risks whose consequences we do not fully understand. This humility leads risk averse people to take precautions that helps to protect us if the consequences of risks are ugly.