Not your average silly season read, the August issue takes as its theme the Stern review on the economics of climate change and features a series of invited editorial essays on the topic.
Published in 2006, the Stern Review is a whopping 700-page dossier written by former World Bank economist Sir Nicholas Stern for the UK government. In economic terms, its chief message is that taking strong, early action on climate change outweighs the costs of doing nothing, or delaying action.
Stern’s analysis showed that by reducing greenhouse gas emissions now, we could limit the cost to as little as around 1% of global GDP (through carbon taxes or emissions trading), whereas unabated climate change could cost the world at least 5% of GDP each year or, in worst-case scenarios, more than 20% of GDP.
Hailed as a landmark report for successfully framing climate change in monetary terms, the review has also received much criticism – chiefly from economists who question the validity of Stern’s approach even if they believe ‘Stern is right for the wrong reasons’, as Gary Yohe and Richard Tol highlight in their essay.
Accompanying the guest editorials is an interesting Commentary by the Editor, Stephen Schneider of Stanford. Schneider warns of the danger and futility of citing frightening absolute numbers of the cost of adapatation and mitigation without taking account of future growth in the global economy, but also of the uneven burden of the cost of dealing with climate change:
Just because overall costs of climate mitigation may not be a large number relative to projected growth in the economy, there will still be individuals and groups with more than average difficulties—coal miners, auto manufacturers making oversized vehicles etc. Thus, the critical challenge to governance is to both protect the planetary commons for our posterity and the conservation of Nature, while at the same time fashioning solutions to deal fairly with those particularly hard hit by both the impacts of climate change (via adaptation programs) or from climate policies (perhaps via job retraining, incentives for relocation of industries, side payments, etc.).
I’d recommend this to anyone looking for a thorough assessment of the Stern report and the respective arguments of Stern’s adherents and detractors. And for some light relief following this hearty read, I’d highly recommend the latest climate post on the Great Beyond – on global warming rugs complete with felt polar bears. Right, off to place my order…