Bjorn Lomborg on Stern Review
A very good review of the Stern Review by Bjorn Lomborg. Now before people call Professor Lomborg a “denier” (a term I despise), I should point out Lomberg says “climate change is a real problem, and that it is caused by human greenhouse-gas emissions”.
How-ever he finds Stern has:
* The review is one-sided, focusing almost exclusively on carbon-emission cuts as the solution to the problem of climate change.
* Even if global warming does significantly increase the power of hurricanes, it is estimated that 95% to 98% of the increased damage will be due to demographics. The review acknowledges that simple initiatives like bracing and securing roof trusses and walls can cheaply reduce damage by more than 80%; yet its policy recommendations on expensive carbon reductions promise to cut the damages by 1% to 2% at best.
* The most well-recognized climate economist in the world is probably Yale University’s William Nordhaus, whose “approach is perhaps closest in spirit to ours,” according to the Stern review. Mr. Nordhaus finds that the social cost of CO2 is $2.50 per ton. Mr. Stern, however, uses a figure of $85 per ton.
* Mr. Stern tells us that the cost of U.K. flooding will quadruple to 0.4% from 0.1% of GDP due to climate change. However, we are not told that these alarming figures only hold true if one assumes that the U.K. will take no additional measures–essentially doing absolutely nothing and allowing itself to get flooded, perhaps time and again. In contrast, the U.K. government’s own assumptions take into account a modest increase in flood prevention, finding that the cost will actually decline sharply to 0.04% of U.K. GDP, in spite of climate change.
* According to the background numbers in Mr. Stern’s own report, climate change will cost us 0% now and 3% of GDP in 2100, a much more informative number than the 20% now and forever.
* In other words: Given reasonable inputs, most cost-benefit models show that dramatic and early carbon reductions cost more than the good they do. Mr. Stern’s attempt to challenge that understanding is based on a chain of unlikely assumptions.
* Faced with such alarmist suggestions, spending just 1% of GDP or $450 billion each year to cut carbon emissions seems on the surface like a sound investment. In fact, it is one of the least attractive options. Spending just a fraction of this figure–$75 billion–the U.N. estimates that we could solve all the world’s major basic problems. We could give everyone clean drinking water, sanitation, basic health care and education right now. Is that not better?