The Stern review on the economics of climate change presents an argument for preventative action, intended to stop the world from getting warmer. I don’t have the scientific background to judge whether or not the arguments about global warming are justified, or whether the predictions in the report are accurate. But I can tell that the proposals in the Stern report don’t follow from the analysis of the problems.
Assuming that Stern is right about the problems, the first question to ask is whether mitigation will work. The analysis in the report depends on the idea that there is a critical range of carbon emissions. If carbon emissions continue at more than that level, the situation will continue to worsen. If they reach that range, they might stop. I say “might”, because that is as far as Stern is ready to go. The estimates he cites suggest a probability of up to one in five that even if the reduction falls well below that range, the global temperature will still increase by 3 degrees – enough, according to the report, to displace 150 million people, and to put up to 500 million people at risk of starvation. What we are being offered, then, is a preventative approach that may not have any effect at all.
The second problem is that even if prevention is possible, it requires the cooperation of every nation. Stern is clear that any measure that fails to engage most of the world’s economies will fail to mitigate global warming. To justify any major investment on the part of a single country, we need to know that that nation’s contribution would make a difference proportionate to its expenditure, or at least some difference. There is no indication that it would.
The third problem is that the solution that Stern proposes – a global market for carbon emissions – could make things worse. Countries in the process of development will be fettered; they can develop under constraints, or they can sell their rights, which offers a short-term return but traps them in dependency. The main way out of the dilemma will be to develop nuclear power – a paradigmatic case of the West willing the end while denying developing countries the means. Stern’s world will be underdeveloped, unjust, and dangerously unstable.
Stern’s central argument rests on the idea that prevention, or “mitigation”, of climate change is possible, and cheaper than “adaptation”, or trying to deal with the consequences. The cost of mitigation is about 1% of GDP per annum over fifty years. There is no real attempt to assess the cost of adaptation, and because Stern says very little about the process, it is difficult to know what the comparison is based on. Two criticisms have been made of Stern. One is that he does not discount adequately – he gives far too much weight to an uncertain future, counting future generations as worth nearly the same as present generations. Because future generations always outnumber the present, this kind of argument can always be used to show that prevention of unpredictable, remote events is worthwhile. The second problem is that he gives far too little weight to the poor, both now and in the future. Stern does accept that the poorest people will be hit first, and hit hardest. If Stern is right, there are major issues looming relating to water supply, agricultural production and the migration of 200 million deprived people. I do not know how much they will cost either, but a forty or fifty year programme of development, resettlement and relief could do a great deal to reduce the harm that the report foresees, and if the numbers of people are those outlined in the report, the money earmarked by Stern for “mitigation” should be more than enough to lift those people out of poverty. It might be prudent to start paying a little more attention to those issues now.
Further note, 1st April 2014: I returned to this blog entry following the publication of the IPCC’s draft report, snappily named WGII AR5. I’m pleased to say that the IPCC have started, at last, to take ‘adaptation’ seriously.