Climate Change Policy and Subjective Well‐Being

Abstract

A small (but increasing) number of economists has recently started to recognize that the costs of climate change mitigation measured as reduced growth in GDP need not reduce welfare in view of the weak correlation between the two in richer economies, provided that mitigation and employment policies are properly combined. In this paper we sketch neglected links between these -now major -research areas and discuss how subjective well-being and employment could be raised in the medium term by cost-effective mitigation and green fiscal policy, in addition to the long-run benefits of greenhouse gas reductions. A 'green new deal' placing more emphasis on climate change mitigation and happiness (rather than GDP as the key proxy for welfare) could be the appropriate strategy in the current economic climate of austerity and worsening recession, while also initiating the large-scale mitigation investment for job creation that is so urgently needed.

Happiness and the Resource Curse

“…there is a positive but concave relationship between happiness proxies and average income (Blanchflower and Oswald 2004;Easterlin and Angelescu 2012;di Tella and MacCulloch 2008). This is in line with the so-called Easterlin paradox, suggesting that the relationship between happiness and average income flattens out for sufficiently high levels of economic development (see Easterlin 1974Easterlin , 2015 where improvements in income levels allows access to some of the basic necessities of life (FitzRoy et al 2012). In addition, while individuals tend to be also concerned about their relative income, this status return from having higher income with respect to a reference group has little impact on country-level happiness over time.…”

Greenhouse gas emissions and subjective well-being: An analysis of Swedish households

“…Having social relationships, good health and being employed are important factors and a climate policy that does not affect these aspects of life negatively, or that even affect them positively (double dividends), is what is important in terms of our wellbeing (see FitzRoy et al 2012 for a review of how climate change policies could act to improve SWB).…”

Building sustainability through greater happiness

“…Documentaries and books on eco-friendly practices and lifestyles have gained popularity, as a growing number of people seem to realise that Prudential regard for planetary health requires that the North accepts not only a slow-down in growth but an actual reduction in material standards of living, at least according to conventional measures. This would … set more realistic aspiration by the South … (Marglin, 2013: 151) A 'green new deal ' (FitzRoy et al, 2012) and a more sober lifestyle are increasingly perceived as necessities. In sum, the cultural influence of ecologism seems to be expanding in Western countries.…”