A critique of the Stern Review
The document analyses the assumptions on the Stern Review - for example, demographics, discount rate, adaptation, extreme weather, non-market damages, knock-on damages, uncertainty and equity - in the understanding that this review might have overestimated the damages of climate change.
The author states that in some of the empirical analysis he has conducted the impacts of climate change are only 0.1% of GDP by 2100. These analyses include adaptation as well as damages and benefits arising from climate change (a situation that is not considered in the Stern Review). Furthermore, the analysis indicates that in the next 50 years the damages of higher temperatures are almost negligible. Thus, rising temperatures might produce damages and benefits. It is in the second half of the century that temperatures become harmful.
The document also critiques the carbon capture proposition in the Review in terms of the availability of technologies and their cost. In addition, it states that a large amount of the captured carbon may find its way back to the atmosphere causing bigger problems than those it tries to prevent. The Stern Review addresses the need for the installation of windmills, solar panels, and the production of biofuels. However, there is a concern in this critique that the Review assumes stability in the price of land, crops, timber land, deforestation prevention and deforestation.
The document concludes that:
- the damage costs of climate change may be lower than those presented by Stern
- adaptation must be considered as an influential factor for determining the costs of climate damages
- temperatures in the following 50 years may produce both benefits and damages
- there is no consensus on whether the estimations of the Stern Review overestimate or underestimate the costs of mitigation.