Climate change: you don’t want to test your assumptions by the experimental results

Economics students are taught that “assumptions don’t matter” on the basis of Milton Friedman’s claim in “The methodology of positive economics” that “the relevant question to ask about the “assumptions” of a theory is not whether they are descriptively “realistic,” for they never are, but whether they are sufficiently good approximations for the purpose in hand. And this question can be answered only by seeing whether the theory works, which means whether it yields sufficiently accurate predictions.” But what if your assumption is that 87% of GDP will be unaffected by climate change, because it takes place in “carefully controlled environments that will not be directly affected”. Don’t laugh, that’s an actual quote from Nobel Prize winner William Nordhaus. Do you test that assumption by its results? In this talk I’ll detail the truly unrealistic assumptions on which Neoclassical climate change economics is based, and what the consequences are of them being wrong.