Stern Review 'exaggerated' costs of climate change
Simon Lauder
ABC News - Jan 25, 2008
The Stern Review found that the world faces an economic collapse on the level of a world war or a depression if climate change is not averted (File photo). (Reuters: Kieran Doherty)
It changed the course of the global debate about climate change, but now the British Government's Stern Review on climate change has been heavily criticised by Australia's Productivity Commission.
The commission, which acts as the Federal Government's economic policy reviewer, says the Stern Review was as much about advocacy as it was about analysis.
Former World Bank chief economist Sir Nicolas Stern raised alarm in 2006 by putting a price tag on climate change and helped make it a hot political topic.
The Stern Review found that the world faces an economic collapse on the level of a world war or a depression if climate change is not averted.
It estimated the cost of global warming at between 5 and 20 per cent of global GDP, compared to just 1 per cent for the cost of measures to prevent it.
But Australia's top economic think-tank, the Productivity Commission, isn't convinced. It has published its own review, finding Sir Nicolas exaggerated the economic costs.
"The review's 'urgent' language can be explained by it being as much an exercise in advocacy as it is an economic analysis of climate change," the commission said.
"It draws heavily on studies that have a more pessimistic view on climate change and its impacts, and gives little attention to more optimistic views."
The Productivity Commission has examined the methodology behind the Stern Review, and concludes the findings can't be called definitive.
"The assertiveness with which some of the headline messages are delivered is not always matched by the caution attached to the evidence and analysis presented within the body of the report," it said.
But Climate Institute chief executive John Connor says that shouldn't distract the Federal Government from its course of action to address environmental problems.
Mr Connor says he doesn't think the Productivity Commission's findings undermine the Stern Review.
"The point that Nick Stern is making is that we need to look at these long-term impacts - looking at short-term impacts always means we'll put off some of the hard decisions," he said.
"And for Australia's it's clear that it's in our national interest that we tackle greenhouse pollution, that we do it at home and we do so vigorously abroad.
"We're the developed country with most to lose to droughts and floods and other storms."
The Australian Government's own version of the Stern Review, by Professor Ross Garnaut, will be released later this year.
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