Stern

If you pay attention to the news at all, you’ve probably heard about the “Stern Report” on global warming. It’s a very cleverly packaged AlGore-esque treatise that makes a startling claim: that we (the whole world, they mean) should immediately start investing 1% of GDP annually in carbon reduction technology. Oh, and if we don’t, Mr. Stern says we’ll be in big trouble.

It’s just talk.

It’s not supported by science, or by economics.

Bjorn Lomborg (author of The Skeptical Environmentalist does a detailed takedown in today’s OpinionJournal (free), concluding:

Why does all this matter? It matters because, with clever marketing and sensationalist headlines, the Stern review is about to edge its way into our collective consciousness. The suggestion that flooding will overwhelm us has already been picked up by commentators, yet going back to the background reports properly shows declining costs from flooding and fewer people at risk. The media is now quoting Mr. Stern’s suggestion that climate change will wreak financial devastation that will wipe 20% off GDP, explicitly evoking memories of past financial catastrophes such as the Great Depression or World War II; yet the review clearly tells us that costs will be 0% now and just 3% in 2100.

It matters because Gordon Brown, Tony Blair and Nicholas Stern all profess that one of the major reasons that they want to do something about climate change is because it will hit the world’s poor the hardest. Using a worse-than-worst-case scenario, Mr. Stern warns that the wealth of South Asia and Sub-Saharan Africa will be reduced by 10% to 13% in 2100 and suggests that effect would lead to 145 million more poor people.

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?

We know from economic models that dealing just with malaria could provide economic boosts to the order of 1% extra GDP growth per capita per year. Even making a very conservative estimate that solving all the major basic issues would induce just 2% extra growth, 100 years from now each individual in the developing world would be more than 700% richer. That truly trivializes Mr. Stern’s 10% to 13% estimates for South Asia and Sub-Saharan Africa.

Last weekend in New York, I asked 24 U.N. ambassadors — from nations including China, India and the U.S. — to prioritize the best solutions for the world’s greatest challenges, in a project known as Copenhagen Consensus. They looked at what spending money to combat climate change and other major problems could achieve. They found that the world should prioritize the need for better health, nutrition, water, sanitation and education, long before we turn our attention to the costly mitigation of global warning.

We all want a better world. But we must not let ourselves be swept up in making a bad investment, simply because we have been scared by sensationalist headlines.

Do read the whole thing. It’s a breath of fresh air…

Bjorn says, in effect, take a deep breath, everybody. First of all, there are reasons to be skeptical of the underlying science (both of the very existence of global warming, and of any purported mitigations). Secondly, even if all the science claims were true, global warming isn’t the worst problem we have — if we were going to spend that kind of money addressing a problem, there are a bunch of other candidates that might be more important.

Global warming is an interesting example of what happens when a complex issue enters the political arena. Politicians look at issues like this differently than most would wish them to — they examine it from multiple perspectives, looking for a way for them to gain some political advantage over their rivals. For one politician, it might be the money he could raise from his district by supporting ethanol — it doesn’t matter to that politician that ethanol doesn’t actually help anything (and quite possibly is worse than using oil-in-the-ground). For another politician, it may be political cover for a large increase in gasoline taxes — and again, it doesn’t matter to that politician that the impact of those taxes is negative for his constituents, as that tax money means more ways for him to control the spending of it, and thereby increase his power.

I could go on and on along these lines, but the real point is this: decision-making in the political arena isn’t the same thing as rational problem-solving. Far from it! It’s not even reasonable to expect it, given the context. Nevertheless, I can’t help but be bitterly disappointed at the direction this particular political debate is going (watch what happens in California next Tuesday), and at the utter lack of sober reasoning it appears to contain.

My prediction: our taxes are about to be raised significantly, and the net carbon added to the atmosphere annually will not decline in my lifetime. In other words, the politicians will raise our taxes under the political cover of “global warming", and they will spend the resulting money on everything under the sun except global warming mitigation. Just as they have spent California’s lottery revenue on anything but…