One of the most famous quotes about economists comes from Fmr. POTUS Truman: “Give me a one-armed economist”. He started using this as a joke in his meeting with his economic council, frustrated that most economists would finish a recommendation with “…but on the other hand…”.
Former Chief Economist of the world bank Sir Nicholas Stern would have been Truman’s dream. The report prepared for Dr. Stern is incredibly one sided as Bjorn Lomborg points out in today’s Wall Street Journal.
The most well-recognized climate economist in the world is probably Yale University's William Nordhaus, whose "approach is perhaps closest in spirit to ours," according to the Stern review. Mr. Nordhaus finds that the social cost of CO2 is $2.50 per ton. Mr. Stern, however, uses a figure of $85 per ton. Picking a rate even higher than the official U.K. estimates--that have themselves been criticized for being over the top--speaks volumes.
Faced with such alarmist suggestions, spending just 1% of GDP or $450 billion each year to cut carbon emissions seems on the surface like a sound investment. In fact, it is one of the least attractive options. Spending just a fraction of this figure--$75 billion--the U.N. estimates that we could solve all the world's major basic problems. We could give everyone clean drinking water, sanitation, basic health care and education right now. Is that not better?
Lomborg sums it up beautifully:
We all want a better world. But we must not let ourselves be swept up in making a bad investment, simply because we have been scared by sensationalist headlines.
It’s bad advice like this that add stink to those of us who actually want to make a difference. By providing the British PM (and the world) with an academically dishonest report, the argument for the mitigation of climate change is weakened. This is akin to the way that watching Jim Bakker will drive rational people away from Christianity.