STERN REPORT BASED ON AN ALARMIST AND IMPROBABLE MODEL

Basing it on observed reality (such as the halt in global warming since 1998) would be too much to expect altogether, of course. Comment on the Stern model below by Tim Worstall. Tim enlarges on his comments on his blog

The Stern Report is now out and as usual with these sorts of things we're going to have the most almighty cat fights about what it all means. A number of observations:

1) The report itself, although not much of the commentary upon it, gives a timescale of 'centuries to a millenium' for the melting of the Greenland and Antarctic ice caps, if that indeed happens at all. No, despite what the papers seem to say, no one is predicting sea level rises of 7 metres in only 94 years time.

2) In order to make mitigation now work financially instead of adaptation later it is necessary to work on the concept of discount rates. The report insists that we should use very low ones with the effect that such mitigating spending now looks better.

3) Quite rightly (to my mind, of course) the point is made that the poor need to be encouraged, even aided, to become richer so that they will be more able to make whatever adaptations are necessary. This would seem to indicate once again that we should abandon our own trade restrictions: nothing helps the poor more than buying the things they make. Free Trade for Gaia perhaps?

There's one part, where they do their own modelling, that I think (again, please note, this is my opinion) is an horrendous error, so bad that I think it discredits everything else. The entire logic behind the call to action runs like this: If we don't change our ways now then people in the future will be poorer than they could have been if we did change our ways. As long as the costs to us are less than the increased income in the future from our doing so, then it is a moral imperative that we should indeed change.

However, the model of the future that is used to calculate said future incomes and costs is the 'A2' model from the Special Report on Emissions Scenarios (SRES), the basis of the IPCC report. (Page 61, chapter three of the Stern Report.) This assumes a medium high emissions scenario, a population of 15 billion in 2100 (!!) and a definite slowing of globalization so that we maintain a series of regional economies with little diffusion of technology. This is referred to as the business as usual (BAU) scenario.

However, that is something of a misunderstanding of the SRES scenarios. Each scenario has an equal probability, there is no such thing as 'this is what will happen unless we do something'. There are other families of scenarios, like the A1, B1 and B2 ones. The A1 family, for example, is based upon the international movement of people, ideas and technology and a strong commitment to market-based solutions. It's worth noting that this produces a world, in aggregate, twice as rich as the A2 one used by the Stern Report and given the lower population, one four times as rich per head of population.

So if indeed it is true that we have a moral duty to ensure that our descendants are as rich as possible (which is, after all, the report's justification for mitigation now) then don't we also have one to push the world in the A1 direction, not the A2? More globalization for example? That would have a much greater effect on their standards of living than any of the mitigation that the report proposes. Missing this point means that I'm rather less than impressed with the rest of the report. (Please note that all SRES scenarios assume no mitigation attempts.)






GREEN MISSIONARIES: BRITAIN SIGNS GORE, SENDS STERN TO CONVERT USA

Britain is to send the author of today's landmark review on global warming to try to win American hearts and minds to the urgent cause of cutting carbon emissions - as it emerged yesterday that the government has already signed up former US vice-president Al Gore to advise on the environment.

Sir Nicholas Stern, who this morning publishes an authoritative report on climate change warning that inaction could cause a worldwide recession as damaging as the Depression of the 1930s, will lobby politicians and business people in America at the turn of the year.

In a separate development, the environment secretary, David Miliband, said the government was discussing imposing green taxes. But the Treasury, which commissioned Sir Nicholas's study, stressed: "The key message of Stern is that international action is required ... The chancellor decides on taxes and he will do so in the pre-budget report and budget."

The government hopes the review will gain traction in the US because it focuses on the economic case for change. Sir Nicholas's analysis warns that doing nothing about climate change will cost the global economy between 5% and 20% of GDP, while reducing emissions now would cost 1%, equivalent to o184bn.

He argues that international negotiations to find a successor to the Kyoto protocol on reducing greenhouse gases must be accelerated, starting at UN talks in Nairobi next month.

The prime minister has said any such agreement needs the support of the US, which refused to join Kyoto because it said it would harm the economy. The White House said last night that it had not read the report. But Kristin Hellmer, the White House counsel on environmental quality, said: "The president has said from the beginning that climate change is a serious issue, and he is taking action on it."

She disputed charges from scientists that the administration had been hostile to the concept of global warming, and that it had set back international efforts to limit greenhouse gases by rejecting the Kyoto treaty.

Alden Meyer, director of policy and strategy with the Union of Concerned Scientists, a US group, suggested the only prospect for a policy shift before the next presidential election in 2008 would be if a delegation from the vast majority of US business - including the coal, utilities and car manufacturing industries - lobbied the White House for action. But he added of today's review: "It is a benchmark in a long process that is going to continue after the release."

Jonathan Porritt, director of the government's independent watchdog, the Sustainable Development Commission, added: "I think it is on a par with the influence of the Intergovernmental Panel on Climate Change and the way in which the scientific evidence that they have marshalled has bit by bit obliged politicians to get into a much more pro-action stance on climate change."

Hopes of a political consensus on green taxes were raised yesterday as David Cameron, the Tory leader, told the BBC he would be prepared to impose taxes on aviation. His remarks followed the publication of a leaked memo from Mr Miliband urging Mr Brown to consider tough levies on flights, motoring and inefficient household appliances.

Source





BRITAIN'S BIGGEST TABLOID SEZ: "WRONG TARGET"

"The Sun", Editorial:

The government's plans to hammer motorists and holidaymakers with extra taxes to halt global warming are simply not good enough. Our readers are already among the world's most heavily taxed people. Huge numbers of them need cars to get to work. They toil for long hours to make an honest living. For many of them public transport can never provide an alternative.

Road charges and punitive taxes on fuel will break the financial back of many families. These are the families who already face massively increased council tax bills - imposed by an expensive army of new snoopers. After paying that lot, will workers be able to afford foreign holidays at all - let alone an extra 5 pounds on their flights?

The proposals contain far too much stick and not enough carrot. Hybrid "green" cars are still too expensive for the lower-paid. Zero road tax plus other financial incentives would help sell them. It must be remembered that the government has turned its back on REAL ways of tackling global warming for far too long. Now, in a panic, it typically tries to punish the people for mistakes of its own making.

This government has already frittered away billions on outdated public services and potty projects. It should bring forward plans to cut spending and make savings. If taxes are to help, they must be REPLACEMENT taxes, not new ones.

Without question global warming is the world's biggest problem. But the answer involves EVERYONE in the industrialised nations changing their ways. The British taxpayer can't do it alone.




GREEN TAXES SPLIT BRITISH LEFT

Consumers could be hit by steep price rises for a range of goods from food to hotel breaks under plans to tackle climate change being considered by David Miliband. The Environment Secretary is consulting taking sweeping powers to extend curbs on greenhouse gas emissions so that they cover many more businesses, including supermarkets and hotel chains - curbs that at present apply only to the big industrial users. The costs incurred are potentially huge and are likely to be passed on to the consumer. The proposal to take "enabling powers" to extend the carbon-trading scheme to other sectors will be taken in the new Climate Change Bill, Mr Miliband confirmed yesterday.

But amid signs of a government split on how to respond to Sir Nicholas Stern's report on the impact of global warming, Gordon Brown is to reject Cabinet calls for swingeing tax rises on motorists and domestic consumers, The Times has learnt. Airline passengers and drivers of large "gas-guzzling" vehicles will bear the brunt of green tax levies, to be introduced by the Chancellor in his last Budget in March. But Mr Brown is opposed strongly to measures that would allow petrol prices to rise even when the world price of oil slumped, as proposed in a leaked letter to him from Mr Miliband.

The disclosure over the weekend of Mr Miliband's "wish list" of taxation measures angered the Treasury and sources were blaming "rogue elements" in No 10 yesterday for its appearance over the weekend. Mr Brown was said to be upset because the leak focused attention on speculation about tax rises rather than on the central message of Sir Nicholas's report; that if the world took concerted action on global warming growth need not be affected. Allies of the Chancellor described the leak as an attempt to put pressure on Mr Brown and to test his modernising credentials.

When they appeared with Sir Nicholas at the launch of his report yesterday both Mr Brown and Tony Blair emphasised the importance of international action - rather than domestic taxes - to reduce carbon emissions. Mr Brown made it plain that he was pinning his hopes on a massive expansion of the carbon trading scheme, by which governments aim to reduce pollution through market mechanisms. He suggested that the scheme, under which firms have to buy credits to emit more than a set level of greenhouse gases, should be extended by linking it with others in California, Australia, Japan and elsewhere.

The Climate Change Bill will enshrine in law the Government's long-term aim of reducing carbon emissions by 60 per cent by 2050. Thousands of organisations, from supermarket groups to hotel chains, are not covered by EU schemes limiting carbon emissions. The "enabling powers" would allow ministers to extend these curbs at will across the rest of Britain's businesses - with potentially huge cost consequences. Many companies that broke possible limits on their emissions and were forced to buy "carbon credits" would be likely to pass on costs to the consumer.

The Environment Department confirmed that the powers could be used to extend curbs to "non-energy intensive" sectors. It said in the summer that measures for businesses not covered by the EU trading scheme, and which account for a tenth of Britain's greenhouse gases, could bring carbon savings of 1.2 million tonnes a year by 2020. David Frost, the head of the British Chambers of Commerce, said that the measures would amount to "stealth tax" in which "business becomes the villain".

Source





Australian economist Alan Wood says: Don't heed Stern warning

Australians are in danger in talking up climate change scares that may never come to pass

The Stern review on the economics of climate change is at least as much a political tool as an economic assessment. This is not necessarily a criticism, if you accept its conclusions. These conclusions are alarming and are being used to spread alarm. If you doubt that, then consider this one: "Our actions now and over the coming decades could create risks of major disruption to economic and social activity, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse these changes."

Or this: "Using the results from formal economic models, the review estimates that if we don't act, the overall costs and risks of climate change will be equivalent to losing at least 5 per cent of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, these estimates of damage could rise to 20 per cent of GDP."

Its author, Nicholas Stern, would no doubt say his aim is simply to bring home the gravity of the challenge climate change represents. That is a commendable aim if action is as urgent as he believes. His proposal for action is not modest. He wants annual global emissions of greenhouse gases ultimately reduced by more than 80 per cent below present levels. His interim aim is to stabilise greenhouse gas levels at between 450 and 550 parts per million of CO2 equivalent. He says this will require emissions to be at least 25 per cent below present levels by 2050, and perhaps much more. There is a carrot offered, as well as a stick. Act now and the costs could be about 1 per cent of global GDP annually, rather than 5 to 20 per cent. Not surprisingly, the headlines in the British press had a doomsday flavour, as did some here. But should we uncritically accept the findings of the Stern review?

Kim Beazley seems to think so. At a Canberra doorstop yesterday he made this sweeping assertion: "I am absolutely fair dinkum about dealing with the consequences of climate change. When we are elected to office, we will fix this." Well, thank God for that, but how? "How you fix it is you start by ratifying Kyoto."

Oh dear. Kyoto was never going to do anything significant about global warming, has fallen apart as key members can't meet its targets for emission reductions, and its associated carbon-trading scheme has turned into a bad joke. Oh, and it excludes the major emitters of greenhouse gases in the developing world, India and China, who have made it clear the Kyoto framework is totally unacceptable to them.

Beazley has no doubts about the Stern report. "Now, this bloke is a World Bank economist, or that's what he was, a World Bank economist. He knows what he's talking about." Not necessarily. When Stern was chief economist at the World Bank he got into an argument with the formidable former commonwealth statistician, Ian Castles, over the inappropriate use of statistics in the bank's development report (on emissions, as it happens), an argument Castles seems to have won.

However, it is simply not possible to comprehensively analyse a report of more than 600 pages within a 24-hour news cycle. It is sensible to wait and see how the Stern review stands up to critical analysis once economists and others have had time to look at it carefully. There are recommendations that make sense regardless of the credibility or otherwise of its economic modelling. For example, it is obviously sensible to focus on clean-coal technology given, as Stern acknowledges, the world is going to be overwhelmingly dependent on carbon-based energy for a long time yet.

However, it would be surprising if the economic modelling emerges unscathed. Bryce Wilkinson, a former senior official with the New Zealand Treasury and now a private consultant, raised some questions in a preliminary look yesterday. For example, he noted it is not clear who conducted the modelling work or whether enough time has elapsed for it to be subject to independent peer review, and commented "one suspects not: this appears to be a case of declaring an unequivocal finding by press release".

The history of economic modelling exercises of this sort, making long-term forecasts about future economic developments, is not encouraging. The Stern review itself sensibly cautions about the inevitable difficulties of all these models in extrapolating over very long periods of time, and warns against "over-literal" interpretation of the results. This caution, however, will be lost on the reader of its boldly stated headline conclusions.

But there is a more fundamental point. As Stern recognises, and John Howard keeps pointing out, there is no way of finding an acceptable method of dealing with emissions unless everybody is in, and we are a long way from that.

It is interesting that when a suggestion was floated for taxes on motorists and air travel in response to Stern there was an immediate and hostile reaction from two British newspapers as different as London's The Sun and The Daily Telegraph. The Sun huffed that "the Government's plans to hammer motorists and holidaymakers with extra taxes to halt global warming are simply not good enough. Our readers are already among the world's most heavily taxed people." The Telegraph said bluntly that green taxes were not the solution to a better world. British business didn't like it either.

Even with the scary scenarios painted by Stern, convincing electorates the pain is worth the gain won't be easy once the costs become transparent. Let's hope the Stern report proves no more reliable than earlier exercises in forecasting the future of the world.

Source

***************************************

Many people would like to be kind to others so Leftists exploit that with their nonsense about equality. Most people want a clean, green environment so Greenies exploit that by inventing all sorts of far-fetched threats to the environment. But for both, the real motive is to promote themselves as wiser and better than everyone else, truth regardless.

Global warming has taken the place of Communism as an absurdity that "liberals" will defend to the death regardless of the evidence showing its folly. Evidence never has mattered to real Leftists

Comments? Email me here. My Home Pages are here or here or here. For times when blogger.com is playing up, there are mirrors of this site here and here.

*****************************************