The Future: Filthy Rich or Stinking Rich?

The New York Sun has an editorial on the Stern review on the economics of global warming which includes a mention of our very own Iain Murray:

Given Britons’s clime it’s easy to see why they would take a dour view of the weather, but even by that standard the Stern Report on global warming is something else. The book-length analysis of the economic ramifications of climate change, prepared by a panel led by a former World Bank economist, Sir Nicholas Stern, is as bleak as any overcast winter day in London. It’s only a matter of time before some start trying to use the report as another excuse to criticize the Bush administration for its supposedly insufficient zeal for changing the weather.

The marquee conclusion reckons we can devote a total of about 1% of the global economy to cutting greenhouse gas emissions now or pay for our inaction later in the form of a global economy 20% smaller each year than it otherwise would be. That shrinkage would come, the report declares, as a result of the costs of climate-related disruptions like coastal flooding and agricultural changes. The report estimates that some preventative action could end up saving the world economy $2.5 trillion a year.


Do the report’s numbers even mean what they appear to signify? Take the 20% figure. Global warming will only become that costly, if it ever does, in 2200. By 2100, meantime, the report’s numbers assume the world economy will be between five times and 10 times larger than it is today, even after making the assumption that free trade and its attendant efficiencies end. It means only that today we face a choice between our descendants being stinking rich or only merely filthy rich, as a scholar at the Competitive Enterprise Institute, Iain Murray, put it to us.

Our take on the conclusions reached by Sir Nicholas Stern is here.