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Wednesday, November 01, 2006

The Politics Behind the Stern Report

On Monday, the Stern report was released. The report details the costs of global warming if we do nothing versus the costs if we take preventative measures today. The report concludes that the costs of action today are less than the costs of doing nothing.

Two of the articles below note that Stern's economic analysis is part of a broader political strategy designed to put pressure on the U.S. to begin taking steps to reduce greenhouse gases. For example, the day after the report was released this commentary criticizing the U.S. for free-riding on countries that have signed the Kyoto protocol appeared in The Guardian:

Stop the free ride, by Philippe Sands, Commentary, The Guardian: The Stern report concludes that reducing the adverse impacts of climate change is highly desirable and feasible. ... One of the main barriers to ... change is the failure to stigmatise the industrialised states that have decided not to join the Kyoto Protocol ... Australia and the US. Putting it another way, these two states derive economic advantages by not joining Kyoto: their producers do not have to pay the short-term costs of implementing emissions reductions. The companies and their producers are free-riders, benefiting from the environmental actions of others without meeting some of the immediate costs.

It is time to start the ball rolling against this unfair subsidy. It is time to start thinking about using economic instruments to encourage Australia and the US to sign up to Kyoto. That means trade measures: levying climate duties - and perhaps even import restrictions or outright bans - on products from these two countries...

It is time for the EU and other industrialised nations to put the US and Australia on notice: if they fail to act in the next 12 to 18 months they should expect products and goods that are produced in a climate unfriendly way to be subject to trade restrictions. ... [T]here is no reason why ... European, New Zealand and Japanese companies, among others, should subsidise their American and Australian competitors.

The Economist goes further into the politics behind the report:

Global warming, economic cooling?, The Economist: Sir Nicholas Stern ... has produced the world’s first big report on the economics of climate change. But his 700-page effort, although stuffed with figures, is not really about economics. It is about politics—the politics of getting America to lead a global effort to mitigate the effects of climate change.

The purpose of Sir Nicholas’s report—commissioned by Tony Blair—is to deal with the argument of people who accept that climate change is happening, but who say that trying to do anything about it would be a waste of money. This argument is heard occasionally in Europe and frequently in America, where, for added potency, it is combined with the notion that European attempts to tax carbon are part of a conspiracy by socialists determined to undermine the American way of life.

Sir Nicholas’s argument is that, far from undermining the American way of life, attempts to mitigate climate change may help preserve it. ... The choice does not look like a difficult one: costs of 5%-20% of global GDP [if we do nothing] versus costs of 1% of global GDP [if we act now]. Unfortunately, that’s not the difficult bit. The difficult bit is the politics. ...

[T]here is one country towards which Sir Nicholas gestures when he writes of the need for “demonstrating leadership” and “working to build trust”, without which all efforts to deal with the problem will fail: America. ... Sir Nicholas does not explain how to solve the difficulty of getting America on board. ...

Apparently, the solution is Al Gore:

Outsourcing Al Gore, by Tom Engelhardt, The Nation: Do you get the feeling that every project the United States might once have undertaken is now ... outsourced...? ... [H]ere's an inconvenient truth to consider. In ... America ..., a former vice-president with a sideline expertise in climate change, is a totally exportable commodity.

On Monday, the British government released a major global-warming study, commissioned by Gordon Brown, leading candidate for Tony Blair's prime ministership. It suggested that, in the coming years, the impact of global climate change could make the Great Depression look like a tea party. The study's author, Sir Nicholas Stern, suggested that the possibility of avoiding catastrophe is "already almost out of reach." The Brits then promptly hired former Veep Gore, clearly unemployable in our country, to advise them on climate change and lobby on their behalf. ...

It's hard to imagine Gore as a foreign lobbyist jollying up to the Bush administration. Could it be that Tony Blair and Gordon Brown are betting on another kind of climate change in the US soon?

    Posted by on Wednesday, November 1, 2006 at 12:21 AM in Economics, Environment, Politics | Permalink  TrackBack (0)  Comments (37)


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