Friday, October 30, 2009

A Stern talking-to

That name really is a bit of a gift to unimaginative headline-writers.

As jules mentioned, we attended another set of Asahi Blue Planet award talks recently, which you can find out about here. This time both of the award-winners were economists, albeit of a rather different flavour. The first, Uzawa-sensei, gave a rather rambling (but interesting) account of the birth and growth of the concept of Social Common Capital, his idea of how to account for the natural environment and social infrastructure that supports society but was basically ignored in standard economic theory. His talk started with the Papal encyclical of 1891 (!) and got about as far as the Papal Encyclical of 1991 before he sort of ran out of steam (and time) and sat down to rapturous applause. There hasn't been a Japanese winner for some time, and the lecture hall was packed, though this may be due to the fact that climate change is high on the agenda these days. I couldn't help but think that mt would have enjoyed the talk (and blogged more usefully about it), it seemed to be right up his street. There are more details about his work on the web page I linked to above, but it seems that the lectures have not yet been published (they will be eventually, judging from previous years).

Lord Stern was rather more down-to-earth, focussing on facts (ish) and figures relating to the economics of climate change, which will be fairly familiar to people who have read (about) his Stern Review on the Economics of Climate Change. It seemed to me that he was rather too quick to rattle off lists of numbers, probably losing the (general and non-scientific) audience in the process. However, he did provide some pretty clear statements (eg calling for an 80% reduction in emissions from developed countries by 2050, and also pointing out that we'd better start acting rather sooner than that) that probably challenged the (usually docile) audience's complacency and resulted in an unusually lively question and answer session. I'm not talking about riots here, anyone who has been to Japan will realise that the standard experience is a stony silence and at best a couple of anodyne "can't we all get along" suggestions.

I've already complained about the excessively pessimistic approach to climate change that Stern took, and again he included numbers like a probability of 69% that a CO2 level of 550ppm would result in a warming of more than 3C relative to pre-industrial. He also quite clearly talked at one point about the future world being poorer than at present after 2050, despite the fact that all of his analysis is explicitly predicated on compound growth of about 5% per annum for the foreseeable future (specifically, 2.5% in developed, 7% in developing countries). That leaves the world about 4x richer in only 40 years, and none of the climate science credibly suggests mass destruction of the global economy over that sort of time scale and likely ~1C warming. There was also a fair amount of (IMO) magic wand-waving, ie the expectation that all we have to do is impose some tax or cap on carbon (he didn't promote one over the other) and the new technology would come along and save the day. Well, it might do...but it might not! There was also lots of praise for Japan's bold and courageous promises on carbon emissions. I use the terms bold and courageous in the Yes Minister sense, but I think Stern was being encouraging :-) Of course the Japanese are now rowing back as hard as they can (or at least laying the groundwork for a hasty retreat), which should be no surprise to anyone...

In the questions, Lomborg came up, which Stern quite clearly and deliberately dismissed as based on "undergraduate errors" (he used the phrase twice) - specifically, the false dichotomy of Lomborg's either/or approach to addressing the world's problems. On this, I agree with Stern of course. People who suggested that it was unfair for developed countries to take the lead were also given short shrift, though Stern pointed the finger pretty firmly at the USA as the worst offender, and didn't put so much emphasis on the large cuts that Japan (and the rest) would need. However he did not shirk the India/China issue, and dealt with it quite fairly, I think.


Alastair said...

"That leaves the world about 4x richer in only 40 years, and none of the climate science credibly suggests mass destruction of the global economy over that sort of time scale and likely ~1C warming."

If the world is 4x richer in 40 years time, it will be generating 4x the energy it does at present.

At the present time, the global economy is teetering because Peak Oil has arrived. If computer based economics could not predict the Credit Crunch, what hope have we that the computer based climate science will predict the Climate Crunch, far less an economic crash within the next 40 years.

"Credibility" is a value judgement, not a scientific argument. Who would have believed that all the Thai resorts on the Indian Ocean would have been wiped out on a Boxing Day?

There is a limit to the human population that the Earth can maintain, and it decreases as the wealth of those citizens increases. When that wealth/oil runs out, everyone will become poorer so they will fight over the resources that remain.

You just don't get it, do you?

James Annan said...


I think you grossly underestimate what would be required to make us all (including developing countries) actually *poorer* over the long term. This last "devastating" recession has been of the order of 2%, maybe one year's growth. (I don't mean to belittle the pain for the small proportion who are badly affected.)

I think everyone knows that large tsunami are possible (indeed likely over the long time scale) although we cannot predict them in detail.

Stern was *not* talking about peak oil or resource depletion, he was specifically talking about the damage that climate change will supposedly do to the world economy, and his words were in stark contrast to his one figures.

EliRabett said...

Eli REALLY hates it when someone quotes a 69% chance on something that is REALLY not precisely known. It kind of shouts that this guy is talking from someone else's notes