Tuesday, October 31, 2006

Climate Change: This Year's Iraq Dossier

I've been perusing the Stern Review on the Economics of Climate Change, trying to pin down the basis of those scary Great Crash projections.

And I've now seen how it works.

First you take the existing mainstream studies of prospective climate change and economic impact. Projected over 200 years (yes... 200 years), they look like this:

So that's a cumulative 5.3% reduction in world GDP over 200 years. Or... umm... can this be right? My calculator says that's only equivalent to a rounding error "loss" of 0.03% pa - rather less than the 1% pa sacrifice we're being asked to make for all those new eco taxes.

Oh dear oh dear. That's not going to make many headlines.

Sir Stern obviously needed some serious sexing up. So he chucked in a few other items... like, what if the mainstream forecasts of climate change are all wrong? What if we cranked up the climate change numbers A LOT? And maybe chucked in some extra for unanticipated climatic "disasters". And then we could add in some numbers - BIG ONES - for non-market "health effects". And some more BIG ONES for non-market "environmental effects" (note for non-economists- "non-market" means it does not actually form part of measured GDP at all). And then we could increase the weighting given to losses incurred by poor countries (note- most of the real losses are actually suffered by them, not developed economies like Britain, which seem to come out quite well).

So how does it look now?

Now that's much better. In 200 years time, there's at least some possibility we'll be 20-30% worse off. Good enough.

Blair, Brown, Millie, the BBC... everyone should be happy with that.

The peerage is in the bag.

Does anyone actually believe this stuff?

1 comment:

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