In 2006, Professor Nicholas Stern produced a report on climate at the request of the British Government. It claimed that climate-related damage would dramatically increase in coming years and was hugely influential at the time. Two years later, Parliament passed the Climate Change Act, the seminal legislation that put Britain on its disastrous path to Net Zero. Seventeen years later, the U.S. economist Professor Roger Pielke observes that Stern’s predictions of climate and weather impacts were only true in one year – 2017 – and in dollar terms the cumulative overestimation in financial damage to date is about $1 trillion.
At the time, the economist Ruth Lea has probably never written a truer word. She told readers of the Daily Telegraph that “I have little doubt that the Government will use the Stern report as a political prop, under the guise of the moral case for saving the planet, for unilaterally raising energy costs”. In the years that followed, successive British Governments did just that, reducing a commitment to cheap local fossil fuel, and promoting unreliable green energy with massive subsidies paid by British consumers.
The Stern Review on the Economics of Climate Change was a major exercise in green scare propaganda highlighting an improbable increase in global temperatures of up to 5°C. Noted Lea: “In Stern’s worst case scenario, global GDP by the end of the century would be 20% lower than would be the case if climate change had been tackled.” She quoted Stern, who said “our actions could create risks of major disruptions to economic and social activity on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century”.
Professor Pielke noted that Stern reported correctly that weather and climate disasters over the decades leading to 2005 totalled around 0.2% of global GDP. Stern made two assumptions of future increases. A lower bound of constant 2% increases in the costs of extreme weather over and above changes in wealth and inflation, and an upper bound assuming a rate of increase of 1% each decade reaching 6% in 2045. Stern said that these values are “likely underestimates”, but the following graph shows that they were not.
In the lower bound example, the grey bars show the expected loss increase from 0.2% of GDP to about 0.35%. The actual losses are shown in black and the dashed linear trend line has hardly moved. Only the one year in 2017 was higher than Stern’s forecast, and Pielke computes the cumulative financial error over the 17 years at no less than $1 trillion. He notes that Stern’s failed prediction “is good news for the world”.
Pielke also compiles a second graph showing the results from the upper bound estimates. These guesses soar quickly but there is no evidence from current loss patterns that that reality will make its presence felt. But then with global warming slowing to barely a 0.1°C rise since the turn of the century, there is not a great deal of reality about Stern’s 5°C temperature hike. Pielke’s observations would seem to undermine the “simple conclusion” of the Stern review that, “the benefits of strong and early action far outweigh the economic costs of not acting”.
These days Professor Stern is the chair of the Grantham Institute for Climate Change at the London School of Economics. Grantham is a promotional research operation committed to accelerating the transition to Net Zero, and it is backed by numerous green billionaire foundations. Its main backer is the green billionaire investor Jeremy Grantham. Stern is still promoting his report, bizarrely telling an audience in October 2021 that his work, “contrary to being alarmist, underestimated the risks, the damage associated with temperatures increasing, and the probability of temperature increases”. It was said to be important to keep going down to zero carbon dioxide by mid-century. Renewables, with storage, he fantasised, now competed without subsidy or carbon price in much of the world. The fact that you can’t store renewables at any worthwhile scale does not seem to have occurred to Stern.
Back in 2006 when Stern’s report was first published, the environmental economist Professor Richard Tol observed: “If a student of mine were to hand in this report as a Master’s thesis, perhaps if I were in a good mood I would give him a ‘D’ for diligence; but more likely an ‘F’ for fail. … Stern consistently picks the most pessimistic for every choice that one can make. He overestimates through cherry-picking, he double counts particularly the risks, and he underestimates what development and adaptation will do to impacts.”
But does any of that matter? Stern was important green nudge propaganda at the time paving the way for a radical collectivist transformation of society through the Net Zero project.
Chris Morrison is the Daily Sceptic’s Environment Editor.
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