The Heat Is Online

Stern: "We Underestimated Climate Damage Costs"

Stern takes bleaker view on warming

Financial Times, April 17, 2008

The Stern report on climate change underestimated the risks of global warming, its author said on Wednesday, and should have presented a gloomier view of the future.

"We underestimated the risks ... we underestimated the damage associated with temperature increases ... and we underestimated the probabilities of temperature increases," Lord Stern, former chief economist at the World Bank, told the Financial Times on Wednesday.

In retrospect, he said, he would have taken a much stronger view in the report on the drastic changes that would come about if greenhouse gas emissions were not abated.

In the report, he estimated the costs of climate change at between 5 per cent and 20 per cent of global gross domestic product.

But these costs would be much higher if the report had taken a more aggressive stance on the probable consequences of warming.

Lord Stern said data published since his report came out, in October 2006, had led him to change his mind.

Last year, the Intergovernmental Panel on Climate Change, the body of the worlds leading climate scientists convened by the United Nations, published the most comprehensive study of climate change science.

It predicted a temperature rise of 3 degrees Celsius within the next 100 years with catastrophic consequences for the planet, unless greenhouse gas emissions were stabilised and then cut within the next decade.

The damage risks are bigger than I would have argued. Things like the damage associated with a 5 degree temperature increase are enormous. We cant be precise about what it would be like but you can say it would be a transformation, he said.

But he defended his estimates of the cost of taking action on emissions, which he put in the report at about 1 per cent of global GDP.

Subsequent reports, [from] McKinsey, the International Energy Agency, the Intergovernmental Panel on Climate Change, have pointed to the [Stern reports] costs of action being roughly in the right ball park. Nothing [since] has led me to revise the cost of action, he said.

I probably would have emphasised the importance of good policy [if writing the report again today] and how bad policy puts up the costs [of cutting emissions], he added.

Lord Stern has come under attack from economists and climate change sceptics since his report, which some sceptics regard as scaremongering.

Some argued that he underestimated the cost of taking action to cut emissions and overestimated the benefits to future generations.

Following the publication of his report, Lord Stern visited dozens of governments around the world to persuade them of the need to cut emissions and the low cost of doing so.

His report has formed a key part of discussions on climate change policy, including the UN-led negotiations last December in Bali at which a timetable was drawn up for two years of negotiations on a successor to the Kyoto protocol., April 17, 2008


LONDON - Climate change expert Nicholas Stern says he under-estimated the threat from global warming in a major report 18 months ago when he compared the economic risk to the Great Depression of the 1930s.


Latest climate science showed global emissions of planet-heating gases were rising faster and upsetting the climate more than previously thought, Stern said in a Reuters interview on Wednesday.


For example, evidence was growing that the planet's oceans -- an important "sink" -- were increasingly saturated and couldn't absorb as much as previously of the main greenhouse gas carbon dioxide (CO2), he said.


"Emissions are growing much faster than we'd thought, the absorptive capacity of the planet is less than we'd thought, the risks of greenhouse gases are potentially bigger than more cautious estimates, and the speed of climate change seems to be faster," he told Reuters at a conference in London.


Stern said that increasing commitments from some countries such as the European Union to curb greenhouse gases now needed to be translated into action. Policymakers, businesses and environmental pressure groups frequently cite the Stern Review as a blueprint for urgent climate action.


The report predicted that, on current treds, average global temperatures will rise by 2-3 degrees centigrade in the next 50 years or so and could reduce global consumption per head by up to 20 percent, with the poorest nations feeling the most pain.


Some academics said he had over-played the costs of potential future damage from global warming at up to twenty times the cost of fighting the problem now, such as by replacing fossil fuels with more costly renewable power.


Stern said on Wednesday that increasing evidence of the threat from climate change had vindicated his report, published in October 2006.

"People who said I was scaremongering were profoundly wrong," he told the climate change conference organised by industry information provider IHS.




A UN panel of scientists, the Intergovernmental Panel on Climate Change (IPCC), writes regular summaries on climate science and last year shared the Nobel Peace prize with former US vice president Al Gore for raising awareness.


Its latest report in 2007 had not taken detailed account of some dangerous threats, including the falling ability of the world's oceans to absorb CO2, because scientists had to be cautious and that evidence was just emerging, the former World Bank chief economist added.


"The IPCC has done a tremendous job but things are moving on," he told Reuters.


"The IPCC's (cautious) approach to this is entirely understandable and sensible, but if you're looking ahead and asking about the risk then you do have to go beyond."


Stern said that to minimise the risks of dangerous climate change global greenhouse gas emissions should halve by mid-century. He said the United States should cut its emissions by up to 90 percent by then.