Jim Manzi uses this assertion to conclude that Waxman-Markey is a bad idea. I would go further. If 3% were a measure of anything realistic it would be hard to argue for the sort of policy measure that we are all so urgently arguing for. So I can't provide a counterargument to Manzi. He even goes so far as to address the fat-tail argument (though of course he misattributes it to Weitzman... sigh...) but it's all calibrated against that 3% .
I think it becomes crucial to track down that 3% and address it. Which makes us all economists, whether we want to be or not. Boulding's observation seems germane; total capital is NOT actually the integral of net economic output. It's where our capital stocks are in 2100, not our GDP, that matters. If climate change is marginal, we should let the chips fall where they may, but the conclusion that only 3% of net economic output is at stake seems totally disproportionate to the risks. IPCC or no (and I've never been a big fan of WGII) I have a lot of trouble believing it.
Hope to pick this up again at some point.
Update: Nice followup here. UT doesn't have priv's to the referenced article, unfortunately. Is this any way to run an intelligentsia?