The Economics of Climate Change: The Stern Review

John Lanchester writes:

It is easy for politicians to stick wind turbines on their houses and ride bicycles, but effective action on climate change is about to require doing things that are not popular. Nicholas Stern argues that it would cost about 1 per cent of global GDP now to prevent a loss of 5 per cent of global GDP in the future. One per cent of global GDP is 600 billion dollars, most of which would be paid by the developed world. The idea is that by paying it now we would be keeping the world’s economy on track so that by 2050 the developed world would be 200 per cent richer and the developing world 400 per cent, while our emissions decline by 60 to 90 per cent and theirs increase by 25 to 50. The promised economic growth is jam tomorrow; we would be paying for it today, in the form of increased taxes and lost jobs. These things are all real to voters in ways that climate change perhaps is not.

(LRB 22 March 2007)

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