Right for the Right Reasons: A Final Rejoinder on the Stern Review

World Economics, Vol. 8, No. 2, pp. 229-258, April-June 2007

Posted: 7 Aug 2007

See all articles by Simon Dietz

Simon Dietz

London School of Economics - Grantham Research Institute on Climate Change and the Environment and Department of Geography and Environment

Dennis Anderson

Imperial College London

Nicholas Stern

Stern Review on the Economics of Climate Change

Dimitri A. Zenghelis

Stern Review on the Economics of Climate Change

Chris Taylor

Government of the United Kingdom - HM Treasury

Abstract

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.

Keywords: Climate change, discount rate, ethics, stabilization, integrated assessment, mitigation, risk, uncertainty

JEL Classification: A11, Q20, Q40

Suggested Citation

Dietz, Simon and Anderson, Dennis and Stern, Nicholas and Zenghelis, Dimitri A. and Taylor, Chris, Right for the Right Reasons: A Final Rejoinder on the Stern Review. World Economics, Vol. 8, No. 2, pp. 229-258, April-June 2007. Available at SSRN: https://ssrn.com/abstract=1005115

Simon Dietz (Contact Author)

London School of Economics - Grantham Research Institute on Climate Change and the Environment and Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://personal.lse.ac.uk/dietzs

Dennis Anderson

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Nicholas Stern

Stern Review on the Economics of Climate Change

HM Treasury
1 Horse Guards Road
London SW1A 2HQ
United Kingdom

Dimitri A. Zenghelis

Stern Review on the Economics of Climate Change ( email )

HM Treasury
1 Horse Guards Road
London SW1A 2HQ
United Kingdom

Chris Taylor

Government of the United Kingdom - HM Treasury ( email )

1 Horse Guards Road
London SW1A 2HQ, SW1
United Kingdom

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