A Missed Opportunity: The Stern Review on Climate Change Fails to Tackle the Issue of Non-Substitutable Loss of Natural Capital

Global Environmental Change, Vol.17, No. 3-4, pp. 297-301, 2007

14 Pages Posted: 18 Apr 2007 Last revised: 9 May 2013

See all articles by Eric Neumayer

Eric Neumayer

London School of Economics and Political Science (LSE)

Date Written: April 1, 2007

Abstract

The Stern Review on The Economics of Climate Change is one of the few cost-benefit analyses of climate change to come out in favour of immediate and decisive action to reduce greenhouse gas emissions. The choice of a low discount rate is the main reason for the Review's divergence in conclusions compared to other economic studies. I argue that the Review's ethical reasons for a low discount rate are defendable, but unlikely to find wider public support. In order to justify spending a large amount of scarce resources for the purpose of limiting climate change it is necessary to move beyond the discounting debate. Unfortunately, the Review did not develop a persuasive argument for why climate change threatens to inflict upon future generations irreversible and non-substitutable damage to and loss of natural capital. This represents a missed opportunity as it would have provided a much more compelling case for drastic action than the Review's arguments for a low discount rate.

Keywords: climate change, greenhouse, gases, emissions, Stern Review

Suggested Citation

Neumayer, Eric, A Missed Opportunity: The Stern Review on Climate Change Fails to Tackle the Issue of Non-Substitutable Loss of Natural Capital (April 1, 2007). Global Environmental Change, Vol.17, No. 3-4, pp. 297-301, 2007. Available at SSRN: https://ssrn.com/abstract=980740

Eric Neumayer (Contact Author)

London School of Economics and Political Science (LSE) ( email )

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