John Quiggin — Shorten gets opportunity cost right

The concept of opportunity cost “The opportunity cost of anything of value is what you must give up so that you can have it.” is the central theme of my book Economics in Two Lessons,due out in the US on 19 April and hopefully in Australia soon after that. My central claim is that two lessons based on opportunity cost and their relationship to market prices provide a framework within which almost any problem in economic policy can usefully be considered.…

So, I was impressed to see Bill Shorten use the term in relation to climate change inaction. Not only that but he used it correctly! Here’s Bill, quoted in the SMH

Opposition Leader Bill Shorten defended the new policy by urging voters to consider the cost of inaction on climate change, saying “There is a huge opportunity cost when we don’t take action,”

What the cost of not doing something is, must be considered along with the cost of not doing it. This is the implicit justification for military spending for "national security" and advancing "national interest." That is to say, existential threats have priority over resources. The question is whether climate change is an existential threat. Is so, then all resources must be mobilized, which will involve sacrificing lower priorities.

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Shorten gets opportunity cost right
John Quiggin | Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a member of the Board of the Climate Change Authority of the Australian Government