Why the Father of Modern Statistics Didn’t Believe Smoking Caused Cancer
priceonomics.com
priceonomics.com
This is a very salient point, and I think defines the right attitude to these matters, eg climate change.
As an aside it is impossible to calculate the net present value of a humanity ending catastrophic event. When we are weighing up the financial cost of doing anything about the release of more GHG into the atmosphere, we have have a finite positive benefit on the release more side (i.e. coal and oil are cheaper than renewals) added to potentially infinite negative extinction event (i.e. the climate hits a runaway positive feedback rise that make human life impossible). The sum is always negative no matter how low the risk of extinction.
That makes this model rather useless for arguing what must be done. For example, it's ridiculously, incredibly unlikely that making tea will lead to extinction by nuclear armageddon. But it's not impossible. As such, making tea would also have an infinite, negative expected value. It would be effectively as bad as just pressing the nuclear button.
That being said, I think your only problem is in assuming that the human race is infinitely valuable. It's not. There's definitely a limit to how much an individual would give up to prevent extinction.
More seriously what would you pay to avoid the extinction of humanity? If the answer is everything then the price is infinite.
There's a bunch of weird issues in this analysis when you pit morally good outcomes vs economically good outcomes.
Similarly, there is a limit as to what the human race as a whole is willing to give up to prevent extinction. For example, it's not worth it to put every person on Earth into a lifetime of miserable slavery just to decrease the odds of extinction from 1% to 0.9%.
If your tool allows infinite negative, it fails at providing guidelines.
In practice humans accepts some chance of extinction in return for an economic benefit. The only problem is as a species we do tend to ignore the long rail risk even when that risk is rather more than zero.
50% of most standard statistics courses fell out of his head.
I believe this is thesis of the original article as well.