Why Economic Analysis Supports Strong Action on Climate Change: A Response to the Stern Review's Critics

Review of Environmental Economics and Policy, Vol. 2, No. 1, pp. 94-113, 2008

27 Pages Posted: 27 Aug 2010 Last revised: 11 Jul 2012

Simon Dietz

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

Nicholas Stern

London School of Economics & Political Science (LSE) - Grantham Research Institute on Climate Change and the Environment

Date Written: 2008

Abstract

Economic research that opposes the strategy of strong and urgent reductions in greenhouse gas emissions often makes the observation, misleadingly, that while scientists, environmentalists, politicians and others would favour strong action, economists would not. Drawing on the Stern Review on the Economics of Climate Change, this paper argues that strong and urgent action is in fact good economics. Much of the previous economic literature on climate change has failed to grasp the necessary scale and timing of action because it has failed to simultaneously assign the necessary importance to issues of risk and ethics. The case for strong and urgent action set out in the Review is based, first, on the severe risks that the science now identifies and, second, on the ethics of the responsibility of current generations for future generations. It is these two issues - risk and ethics - that are crucial.

Keywords: Climate change, discounting, ethics, risk, uncertainty

JEL Classification: A11, H43, Q54

Suggested Citation

Dietz, Simon and Stern, Nicholas, Why Economic Analysis Supports Strong Action on Climate Change: A Response to the Stern Review's Critics (2008). Review of Environmental Economics and Policy, Vol. 2, No. 1, pp. 94-113, 2008. Available at SSRN: https://ssrn.com/abstract=1665040

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

Nicholas Stern

London School of Economics & Political Science (LSE) - Grantham Research Institute on Climate Change and the Environment ( email )

Houghton Street
London, WC2A 2AE
Great Britain

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