Australian economist, John Quiggin, has undertaken a blog review of the UK Government’s Stern review on the economics of climate change.  The highlights of his review are:

“(i) Stern’s estimates of the cost of stabilising CO2 levels (1 per cent of GDP by 2050) are optimistic, but in the right ballpark
(ii) Stern’s treatment of discounting is correct (More to come on this, I hope)
(iii) Stern underestimates the costs of Business As Usual, particularly in relation to environmental damage
(iv) Headline reporting of Stern overstates the risks of worst-case outcomes in the long tail, but critics are wrong to suggest that low-probability extreme outcomes should be ignored.

Overall, my conclusion is that the Stern review gets the basic economics and the policy recommendation right, even if the presentation is inevitably political.”

Technorati Tags: climate change, CO2, environmental damage

This entry was posted on November 21st, 2006 at 18:32 (GMT) and is filed under Forecasting & Modelling, Policy . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.