Nicholas Stern

A Blueprint for a Safer Planet is Nicholas Stern's book that put forwards what Stern thinks should be done to combat Anthropogenic Global Warming (AGW). Stern is an important figure in AGW economics because he was selected to write an economic case to justify the policies that the Blair / Brown government wished to follow. His Stern Review was similar to Australia's Garnaut Review.

Stern, who only started to study AGW economics in 2005, made a number of contributions to climate change economics. Previous studies had put the alleged damage from AGW at a about of 5% of GDP. Stern managed to get it to start at 5% and go to a maximum of 20% damage to GDP. Other economists who had been studying climate change for up to a decade had also used discount rates that had been traditionally used for long term economic calculations of 2% to 10%. Stern instead constructed an innovative 'social discount rate' that was only 0.01%. This was very innovative in that he had a discount rate, if he had used zero his report would have been immediately questioned, but by using something that was effectively zero he could make abatement appear as a better option. Partha Disgupta has called Stern's discount rate "patently absurd" as it would imply a savings rate of 97.5% compared to the observed rate of around 15%.

So the book was expected to attempt to justify some of Stern's assumptions and to put forward the case as to why AGW should be addressed with huge sums of money.

Stern accepts all the IPCC figures and starts from there. He spends fairly little time on looking at the IPCC's results. He does mention the 'deniers' but doesn't look at any of their arguments. He doesn't mention Lindzen, Spencer, Christy or any of the better known skeptics and states that the loudest skeptics are not scientists. This is in contrast to Al Gore.

Stern uses a table of probability of parts per million against the likelihood of a particular rise in temperature as his base for various scenarios and goes on to attempt to price how much achieving these levels of C02 would cost. Stern goes on to look at what reductions in C02 emissions can be made and how much things are likely to cost. Here Stern is defending the cost estimates that he made in his report that others termed very optimistic. Stern is an advocate of all the possible technologies including nuclear and Carbon Capture and Storage (CCS). This is a good thing. It is disappointing to see that countries that have large uranium reserves and whose current governments regard C02 emission reductions as crucial are excluding the technology that has already been used to reduce c02 emissions successfully while maintaining a high standard of living as demonstrated by France.

The book also has something of a response to Stern's critics like Nordhaus and Richard Tol. Stern states that his discount rate is an ethical choice. He also pushes the argument that even if AGW has been exaggerated that doing something about is worthwhile just in case. He also frequently refers to his area of expertise that of attempting to reduce poverty in the developing world, in particular in Africa. He states that there is no choice involved in spending on money on either one of these goals and that instead both must be attempted. Stern does openly acknowledge that the largest emitters of greenhouse gases is China. Stern doesn't mention Lomborg but is apparently away of Lomborg's position and does state that spending money on dealing with the possible adverse consequences of AGW should also be attempted but that it is only a small part of a more costly solution.

Stern does mention the figures that he says will be needed to be spent. He talks about 1-2% of GDP instead of mentioning the direct amounts of money of 0.5 to 1 trillion dollars per year. He also tends to talk in terms of the percent of GDP when assessing possible future damages so this isn't unreasonable and does mention direct figures of some factors of reduction cost directly.

Stern isn't a bad writer and this isn't a bad book. It addresses some of the criticisms made against the Stern review by economists who have specialise in studying the economics of AGW. Stern keeps the book fairly brief and to the point. It's good to be able to read environmental forecasting books at this time. Reading books like The Population Bomb 40 years after their predictions have been shown to be wrong is one thing, reading the latest forecasts of environmental doom should also be done to see how the forecasts will fair in the future.… (plus d'informations)

Review of The Global Deal: Climate Change and the Creation of a New Era of Progress and Prosperity, By Nicholas Stern

Nicholas Stern is a very interesting man. A member of the British House of Lords (Baron Stern of Brentford!), he was chief economist of the World Bank and head of the British government’s economic service. In 2005, the UK leadership asked him to undertake an evaluation of the costs and benefits of dealing with global warming, and the report he produced a year or so later became one of the landmark documents in the twenty-year debate over climate change.

What Stern’s team concluded, to be very brief about it, is that the cost of doing nothing about global warming would be very high (larger than the costs of the both world wars and the Depression combined), while the cost of transforming our energy system would be relatively low. In this very lucid and well-written book, he manages to go into detail on those points, mixing in some of the latest science. And as a bonus, he provides a fascinating look at the complicated international politics of climate as we approach this December’s momentous Copenhagen global warming negotiations.

Stern begins where any account of the problem must, with a quick recapitulation of the science. Though he has the annoying habit of using a particularly arcane metric (co2-equivalent concentrations, which includes a variety of other gases and is an unnecessary and obscuring filigree when carbon dioxide is the main problem), his view is based fairly strongly on the reports of the Intergovernmental Panel on Climate Change. He believes that nothing we can do will prevent us from a warming of more than three degrees Fahrenheit (so far we’ve seen about one degree) and he believes really catastrophe lies north of that number, at five or six degrees Fahrenheit. Here his science is perhaps a little out of date—the most recent data indicates that we’re already seeing enormous shifts in the planet’s climate system (the melt of Arctic sea ice and so forth). We now think that we can afford even less carbon in the atmosphere than Stern contends.

But never mind—in any event, the job of curtailing emissions is large enough no matter where you start. As Stern shows through a series of easy-to-follow calculations, U.S. industry will need to be essentially carbon-neutral by mid-century, with much of that change coming in the next decade, and even China will have to reduce the amount of energy it uses per unit of output by as much as 95 percent. That will be the largest short-term task that human beings have ever undertaken—as Stern rightly points out, it’s very much harder than landing a man on the moon. (It’s more like landing everyone on the moon).

If it’s going to happen, we’ll have to hope that all the possible technologies work. Some are clearly coming along nicely—wind is the fastest growing source of electric generation on earth. But others, not so much. Stern is very hopeful about the prospects for sequestering the carbon pouring out of the smokestacks of coal-fired power plants. This is so far a techno-fantasy, in that nobody is doing it. And the infrastructure required would be mind-blowingly large—by some estimates you’d need as much piping as the whole petroleum industry has built up over the last century. Still—whether with carbon capture or some other technology—we have to at least try to get this problem under control.

And the good news, Stern insists, is that it’s affordable. It would require about 2 percent of the world’s GDP each year over the next half century, he calculates—and since economies will be growing quickly, we’ll be able to manage that. “Such a payment is not very different from the premium to insure against a small probability of a disastrous outcome,” he writes. “Another way of looking at it is to recognize that such a one-off cost would imply that the world economy would take roughly an additional six months in reaching the level of world income it would otherwise reach by 2050.”

After laying out the basic case, Stern reaches the most interesting part of the book, and the section that’s freshest. In the years since his report was published, he has traveled the globe, meeting with policy-makers and premiers. He offers here a not-very-veiled set of instructions for them to follow in the next seven months leading up to Copenhagen.

There will, he says, be four main players: the EU, the US, China, and India. The Europeans have been at the forefront so far, and doubtless will continue to push the pace. America is clearly back in the game with the election of Obama, though the Congressional politics of passing a bill (never mind confirming a treaty) are large. But if the U.S. acts on domestic legislation sometime fairly rapidly (and Rep. Henry Waxman of California has just put forth a sweeping bill), it “could unlock potential international commitments, particularly from developing countries, in the near future.” In India, the sprawling democracy leads real progress prey to demagogues who will say it balances the world’s carbon budget on the back of the poor—but increasingly Indians re realizing the danger they face from out of control climate change.

It’s China where Stern provides the most interesting analysis. Stern says he made his most recent visit in October of last year, meeting with the highest-level officials, and he is optimistic that they’re ready for a deal. Already, he notes, they’ve passed aggressive mileage legislation for cars, started shutting down inefficient factories, and begun massive reforestation campaigns. They’d like, all things being equal, to keep burning coal, because it’s the cheapest way to keep pulling people out of poverty (and maintain the stability on which Party rule depends). But they recognize their own deteriorating local environment, and more they recognize “that there will be no global deal unless China plays a very strong role: it is a potential deal-breaker. If you know you are vulnerable if a deal fails, and if you know you are a potential deal-breaker, then you have to concentrate.”

The good news, he points out, is that the country is run mostly by engineers, who are capable of engaging the U.S. directly over questions of technology transfer. The conversation will go something like this: we’re going to need our help if they’re going to kick the coal habit. In fact, the whole developing world will require assistance from the rich world—assistance that’s only just, given that we’ve spent centuries filling the atmosphere with carbon, the very act that made us rich. If they’re going to forego that strategy, we’re going to need to help them do so—and help them cope, too, with adapting to the change that’s already too late to avert.

This call for a powerful internationalism is the hallmark of Stern’s book. He points out that this is the first international negotiation in which the developing world comes to the table with leverage. If we design a new regime for controlling carbon, it can’t be run by the west alone, or even mainly. “Climate change is a subject covering the entire planet, and 8 billion of the 90 billion who will be on this planet in 2050 will be from currently developing countries. If this new institution is to work effectively, it must start with a governance structure and with rights to shape and determine decisions which reflect the whole world in an even-handed way.” A tough order of business, for the toughest of problems.

Progressive Book Club editorial board member Bill McKibben is an American environmentalist and writer who frequently writes about global warming, alternative energy, and the risks associated with human genetic engineering. Beginning in the summer of 2006, he led the organization of the largest demonstrations against global warming in American history. He is the author of many books.

This review originally appeared at Progressive Book Club.… (plus d'informations)