Six leading economists and policy formers*, including a former Chief Economic Adviser to the DTI, a former deputy Chief Adviser at HM Treasury and a former Head of Economics and Statistics at the OECD, call for climate change policy to be based on pragmatism, not global salvationism, in a new book published today by the Institute of Economic Affairs.**
The authors argue that the Stern Review is seriously flawed. A small change in the discount rate used would slash the estimated economic impact of climate change from 5% of GDP to 1.4%. In a recent interview Lord Stern has himself suggested just such a change in the discount rate. This completely undermines the reports original case for urgent and radical action that damages the economy in the short term.
It is also suggested that the IPCC, the internationally-recognised, UN-established panel on climate change, no longer has the participation of mainstream professional economists and has been captured by true believers. According to David Henderson, former Head of Economics and Statistics at the OECD, The professional advice which governments continue to rely on has been, and still is, suffused with bias.
The authors conclude that climate policy has become subject to a quasi-religious mindset, driven by the desire to maintain consensus and defend its dogma, rather than seeking the best policy for the future. They point to the failure of past catastrophic predictions and the damage pre-emptive precaution has caused, notably the 100 million deaths from malaria that resulted from Rachel Carsons fears about DDT.
The authors claim that government intervention today over climate change is likely to harm our economy and unlikely to save the planet. Julian Morris, head of the International Policy Network, observes that We have already seen enormous damage as a result of the attempt to implement the Kyoto Protocol. Sir Ian Byatt writes, Such an approach wo