Letter from the UK

Nicholas Stern: The Most Dangerous Man You've Never Heard Of 

James Delingpole
The Telegraph

Ask almost anyone who Nicholas Stern is and you'd surely draw a blank. But as Andrew Montford suggests at his Bishop Hill blog, there are few men who have had quite such a deleterious effect on our lives as this dreary ex-civil servant now known – to those few who do know of him – as Lord Stern and doing very nicely thank you at his extremely well-paid job fomenting climate alarmist drivel at the Grantham Institute.
Says Montford (and gosh how it does the heart good to see this mild-mannered fellow getting so righteously, viciously angry!)

Nicholas Stern is to blame.

When you see wind farms covering every hill and mountain and most of the valleys too, you can blame Stern. If you can't pay your heating bills, ask Stern why this has happened. When children are indoctrinated and dissenting voices crushed, it is at Nicholas Stern that you should point an accusing finger. When the lights start to go out in a few years time, it's Stern who will have to explain why.

Montford is right but for the full gory details you must go to the devastating and excoriating new report written by Peter Lilley and published this morning by the Global Warming Policy Foundation.
The report is titled: What's Wrong With Stern? (Though, maybe, a better one would be "What Isn't wrong with Stern?")

To recap, Stern was the author of The Economics Of Climate Change: the Stern Review – a 712-page report described by the then prime minister Tony Blair as "the most important on the future ever published by this government." (And Blair was probably right: the damage Stern's dangerous nonsense would end up doing is almost incalculable).

Stern's headline conclusions were:

"If we don't act, the overall costs and risks of climate change will be the equivalent to losing at least 5 per cent of global GDP each year now and forever"  whereas  "The costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1 per cent of GDP each year."

Pretty much every piece of dire "environmental" policy enacted or proposed since – the carbon taxes, the devastation of our landscape with wind farms, the rise in energy bills, the growing regulatory burden, the abject misery which comes from being controlled by hair-shirt eco loons – is the result of Stern's bravura combination of junk economics with junk science.

Sure, others such as Al Gore had sowed the seeds; but it was Stern's apparently rigorous, cost-benefit-analysing report which gave politicians the justification they felt they needed to go ahead and bomb our economies back to the dark ages in order to save the planet for "future generations." (Future generations, it should be noted, who are going to be a hell of a lot richer than we are, and consequently far better capable of dealing with any climate disasters that might arise)

Except, as Richard Tol notes in his scathing intro to Lilley's report, Stern was quite unfitted to make such claims.

"Sir Nicholas, now Lord Stern, was portrayed as an expert even though he had never published before on the economics of energy, environment or climate."

The result was a report riddled with errors which are "systematic and suggestive of an ideological bias".
Tol concludes: "Its academic value is zero."

And Tol should know. He is one of the world's leading environmental economists, who had been involved with all three IPCC working groups, was author of the UN's Handbook on Methods for Climate Change Impact Assessment and Adaptation, and who remains a "warmist." Within weeks of the Stern review's publication, Tol had dimissed it as preposterous. So it's no surprise that he should welcome Lilley's renewed attack.

Stern's report was never really an economic or scientific work, but a piece of propaganda designed to please his political masters and advance a particular cause.

Or, as Lilley puts it:

[H]is Review was an exercise not in evidence based policy making but in policy-based evidence making.

The big problem with Stern's report, as has long been noted by critics, is its improbably low discount rate. Andrew Orlowski at the Register offers a useful summary:

So what, then, is a discount rate?
"It's the cost of doing something now, versus the benefit accrued in the future," says Lilley. "Everyone does it; it's a calculation we do instinctively, even if we don't realise we're doing it."
Stern's 'trick' was really twofold. Firstly, he used an improbably low discount rate – the exact figure, over 700 pages, he omitted to disclose. The second was the use of the word 'forever'. Stern made a projection of the losses to infinity. The result was that the costs were underestimated by a factor of between 2.5x and 5x.
Fundamentally Stern was asking the current generation to accept a 5 per cent hit in income, so that a future generation seven times richer would not suffer 5 per cent loss of income.
"He is entitled to use a low discount rate, but only if he accepts that, logically, he should advocate investing in a Norwegian-style ‘fund for the future’, not just in mitigating climate change but in any projects with returns above his discount rate until the market rate and his discount rate converge," notes Lilley's study.
Stern made some other curious assumptions, Lilley points out. The World Bank has estimated that Bangladesh needs to devote 1 per cent of its GDP today to stop flooding.
"Bangladesh today is far wealthier than Holland was when it built its dikes," says Lilley. "The idea that they can't build irrigation, that they can't adapt, is a racist view."

Lilley's findings are not new – but this is no reflection on Lilley or the Global Warming Policy Foundation. Rather, its a terrible indictment of the gulf that exists between those in the bubble of environmental policy making (the politicians, the junk science establishment and their various rent-seeking friends and hangers-on in the media and industry) and those of us living in the real world who have to bear the consequences of their incompetence, malfeasance and poor thinking.

Lilley's report gives Stern the kick in the teeth he has long, long deserved. Will it make any difference? I doubt it. I mean, have you heard been reported much – if at all – anywhere in the mainstream media?