World Economics: Climate Change articles

A good collection of papers that continue the "economics of climate change" debate.

Included is a paper from Simon Dietz, Dennis Anderson, Nicholas Stern, Chris Taylor & Dimitri Zenghelis entitled "Right for the Right Reasons" arguing against the general view from many economists that the Stern review somehow got it right but for the wrong reasons. They call this the FINAL rejoiner - case closed?

World Economics

CLIMATE CHANGE

Continuing the debate from previous issues, a paper by Simmonds and Steffen criticises part 1 of the ‘Dual Critique’ by Carter et al. on the science of climate change, that appeared in Vol. 7, No. 4 of this journal. The dual critique authors respond. The debate then moves on, with responses by critics of the Stern Review to papers in the previous issue [Vol. 8, No. 1] by defenders of the Review’s approach and conclusions. An article by David Henderson questions the way governments are responding to climate change issues and in particular their reliance on the process of the Intergovernmental Panel on Climate Change. The debate is concluded in this issue with a final rejoinder by members of the Stern team.

Response to ‘The Stern Review: A Dual Critique—Part I: The Science’
Ian Simmonds & Will Steffen
In their comments on part one of the ‘Dual Critique’ [Vol. 7, No. 4] the authors draw attention to a number of instances where the treatment of sources and evidence is selective and biased, and perhaps where it reveals a modest understanding of the vast amount of conventional and well-established literature on climate science and allied topics. The purpose of this record is not fundamentally to dissect all the main points made by the Dual Critique authors. Rather, Simmonds and Steffen have confined themselves to commenting under a few headings on issues which they found particularly striking (grossly misleading, inconsistent with the workings of the climate system, or just plain wrong).

Response to Simmonds and Steffen
David Holland, Robert M. Carter, C. R. de Freitas, Indur M. Goklany & Richard S. Lindzen


A Stern Reply to the Reply to the Review of the Stern Review
Richard S. J. Tol & Gary W. Yohe
Tol and Yohe point out that, in their reply [Vol. 8, No. 1] to Tol and Yohe’s review [Vol. 7, No. 4], the Stern team demonstrates the fragility of the numerical findings of the cost–benefit analysis in the Stern Review. At the same time, the Stern team puts less weight on cost–benefit analysis as a guide to policy making on climate change. Tol and Yohe show that the Stern Review allows several, mutually contradictory interpretations of the model that underlies the cost estimates; and argue that each interpretation implies that Stern’s cost estimates have a severe downward bias.

Climate Science and the Stern Review
Robert M. Carter, C. R. de Freitas, Indur M. Goklany, David Holland & Richard S. Lindzen
Fundamentals of the climate science dispute and common misunderstandings of some issues raised about Part 1 of the Dual Critique of the Stern Review [Vol. 7, No. 4] are discussed. One consideration is that a distinct anthropogenic greenhouse gas signal has not yet been identified within natural climate variations. The slight warming that has occurred in the late 20th century, falling within previous natural rates and magnitudes of warming and cooling, is a priori unalarming. Empirical evidence shows that the warming effect of increasing carbon dioxide at the rates of modern industrial emission and accumulation is minor, noting the established logarithmic relationship between gas concentration increases and warming. No global increase in temperature has occurred since 1998 despite a 15 ppm (4%) increase in carbon dioxide concentration, and an expectation of continued warming even at constant CO2 levels. The key issue is assessment of risk, but that includes the risk of future coolings as well as warmings, as well as their significance relative to other factors. This is why an adaptive policy towards climate change is the most sensible response option.

Governments and Climate Change Issues
The case for rethinking
David Henderson
Governments, and in particular the governments of the OECD member countries, are mishandling climate change issues. Both the basis and the content of official policies are open to serious question. Too much reliance is placed on the established process of review and inquiry which is conducted through the agency of the Intergovernmental Panel on Climate Change. This process, which is wrongly taken to be objective and authoritative, has been made the point of departure for over-presumptive conclusions which are biased towards alarm, in the mistaken belief that ‘the science’ is ‘settled’. Rather than pursuing as a matter of urgency ambitious and costly targets for drastic further curbing of CO2 emissions, governments should take prompt steps to ensure that they and their citizens are more fully and more objectively informed and advised. This implies both improving the IPCC process and going beyond it. As to the content of policy, it is not the case that the choice now lies between two extremes, of no action and the immediate adoption of much stronger measures to curb emissions. The orientation of policies should be made more evolutionary and less presumptive, with actual policy measures focusing more on carbon taxes rather than the present and prospective array of costly and intrusive regulatory initiatives.

Right for the Right Reasons
A final rejoinder on the Stern Review
Simon Dietz, Dennis Anderson, Nicholas Stern, Chris Taylor & Dimitri Zenghelis
Four authors of the Stern Review on the Economics of Climate Change, and Dennis Anderson who provided advice and background papers for the Review, make a final rejoinder on the debate about the Review that has occupied recent issues of this journal. They respond to comments in the present issue by Carter et al., by Henderson, and by Tol and Yohe. Carter et al. continue to argue against a growing body of scientific evidence and a growing consensus on that same evidence. The source of their critique is, first, a distinctly partisan, and increasingly untenable, position on the broad range of available scientific evidence and, second, a mistrust of the international consensus-building exercise centred on the Intergovernmental Panel on Climate Change. Henderson is also largely preoccupied with the latter, procedural issues. Tol and Yohe focus on economic arguments. Their critique is rather narrower in focus and concerns the way in which abatement costs were calculated in the supporting work carried out by Dennis Anderson. It rests on basic confusions and misconceptions, many of which were explained in previous contributions. However, readers of World Economics might be more interested in a broader reflection: how would the Stern team, following the debate of the last eight months, assess the approach, policies and arguments set out in the Review? Their view is that their analyses and policy proposals, and the arguments in support, are sound and have stood up well to scrutiny. In other words, they were right and for the right reasons. Central to many critiques of the Review is a fundamental misunderstanding of the role of formal, highly aggregated economic modelling. Nevertheless, the Stern team have argued strongly and in their view convincingly that, even within the confines of formal economic modelling, the concerns raised by a small group of commentators do not overturn their basic conclusion that the cost of action is much less than the cost of inaction. The critics here fall short by failing to simultaneously afford the necessary importance to issues of risk and ethics.