An important new study by Peter Lilley confirms the view that the Stern Review was just plain wrong, and that the costs of climate mitigation substantially exceed the harm that might be done by climate change, even if you accept the IPCC view that man-made CO2 emissions are causing a problem. I am quoting Peter’s Press Release in full — because Peter is right, and the argument cannot be set out too often.
GOVERNMENT CANNOT RELY ON STERN REVIEW TO JUSTIFY COSTLY CLIMATE CHANGE POLICIES, SAYS NEW REPORT
London, 4 September: As the cost of government measures to combat climate change hit households and businesses, a new study published by the Global Warming Policy Foundation casts grave doubts on the validity of the “Stern Review of the Economics of Climate Change” which the government relies on to justify its policies.
The substantial study, by Peter Lilley MP, is the most thorough analysis of the Stern Review so far undertaken. It takes the IPCC’s view of the science of global warming as given, but points out that Stern’s economic conclusions contradict the views of most of the world’s leading environmental economists and even the economic conclusions of the IPCC itself. The study also catalogues a series of errors and distortions in the Stern Review “any one of which would have caused it to fail peer review”.
Because Stern’s conclusions endorsed policies adopted by both government and opposition and its highly tendentious assumptions were not explicit, it was initially accepted without public scrutiny.
The new study shows the Stern Review to depend critically on “selective choice of facts, unusual economic assumptions and a propagandist narrative — which would never have passed peer review”.
Describing it as “policy based evidence”, Peter Lilley argues that the government can no longer rely on it to justify expenditure of many billions of pounds and calls for a return return instead to “evidence-based policies”.
Stern’s central conclusion that “If we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year now and forever” whereas “the costs of action — reducing greenhouse gas emissions to avoid the worst impacts of climate change — can be limited to around 1% of GDP each year” is found to be entirely fallacious.
Lilley’s study demonstrates that the benefits of curbing emissions now and henceforth will not be five times the cost of action, as Stern claims. “It is achieved by verbal virtuosity combined with statistical sophistry. In fact, even on Stern’s figures, the cumulative costs of reducing greenhouse gases will exceed the benefits until beyond 2100″, Lilley points out.
“If we continue to follow Stern’s advice, the principal losers, apart from British taxpayers and businesses, would be developing countries who cannot raise living standards without massively increasing their use of fossil fuels and will therefore be responsible for most of the growth of carbon emissions,” Lilley argues.
Lilley asks: “why should this comparatively poor generation make the sacrifices Stern demands to improve living standards of people in 2200 who, if we take no action to prevent global warming – – even on the worst scenario depicted by Stern — will be 7 times better off than us?
Lilley calls on the government to cease basing its climate change policy on the flawed Stern Review and commission a new independent cost benefit study of alternative strategies.