Peter Lilley roept Britse regering op zich te distantiëren van ‘Stern Review’

 

Ik heb reeds verschillende malen aandacht geschonken aan de ‘Stern Review’ die tien jaar geleden is verschenen. Zie onlangs nog hier.

Dit rapport was vervaardigd in opdracht van de Britse regering door een team onder leiding van de Britse econoom Nicholas Stern. Het viel in goede aarde bij de opdrachtgevers en Stern (zie afbeelding rechtsonder) werd in dank daarvoor in de adelstand verheven. Ja, zo gaan die dingen in het VK.

 

Het was extreem alarmistisch wat betreft de keuze van de toekomstscenario’s. Ten aanzien van de kosten van het klimaatbeleid was de conclusie dat die wel zouden meevallen en minder zouden zijn dan de baten, in termen van het vermijden van allerlei virtuele schade als gevolg van de opwarming van de atmosfeer. Volgens critici was dit de vooropgezette conclusie van de opdrachtgevers omdat het rapport moest dienen als legitimatie van de ‘Climate Change Act’ (2008), waarin draconische maatregelen werden aangekondigd om de Britse CO2-uitstoot in 2050 met ten minste 80% te verminderen t.o.v. het niveau in 1990.

De opposistie was fel. Zo schreef de Britse wetenschapsjournalist, Christopher Booker, dat het klimaatbeleid ‘will turn out to be one of the most expensive, destructive, and foolish mistakes the human race has ever made.’ Maar in de ban van de klimaathysterie werd de ‘Climate Change Act’ met een meerderheid van Noord-Koreaanse allure door het Britse Parlement aangenomen. Er waren slechts vijf parlementariërs die het hoofd koel hielden en tegen stemden.

Nu de opwarming maar niet wil komen en de klimaatmaatregelen hoe langer hoe meer maatschappelijke pijn veroorzaken – in het bijzonder wat betreft het gebruik van dure en onbetrouwbare hernieuwbare energie voor de elektriciteitsvoorziening – groeit de weerstand tegen het klimaatbeleid in het VK.

Onlangs opende voormalig minister Peter Lilley (zie afbeelding boven deze ‘posting’) – een van de tegenstemmers van de ‘Climate Change Act’ – opnieuw een frontale aanval op de ‘Stern Review’. Wegens de tekortkomingen daarvan pleitte hij ervoor dat de regering zich daarvan zou distantiëren. De ‘Global Warming Policy Foundation’ (GWPF) publiceerde zijn opvattingen in een rapport, getiteld: ‘The Stern Review ten years on.’ Mede-auteur van dit rapport was Richard Tol met een eigen inbreng. In zijn inleiding merkte Lord Lawson, de voorzitter van de stichting, op: ‘I hope the analysis contained in this new publication will help to bring much-needed sanity to this important, and at present highly costly, area of policy.’

Lilley’s aanvankelijke twijfels over de ‘Stern Review’ werden versterkt door de kosten/batenanalyse (die in het VK wèl maar in Nederland nooit heeft plaats gevonden!) van het klimaatbeleid. Hij schrijft daarover:

The government, as for any piece of legislation, was required to publish a cost–benefit analysis – called an Impact Assessment – to demonstrate to Parliament that the measure was worthwhile. But this Impact Assessment was unprecedented. It showed that the potential cost of the measure was twice the maximum benefit (in terms of reduction of damage global warming and the damage it would have caused across the world). This – not any scepticism about the science of global warming – prompted me, along with four others, to vote against the Bill. The Impact Assessment flatly contradicted the Stern Review, which claimed that the cost of preventing undue global warming would be a fraction of the benefits. But neither the contradiction, nor the Stern Review itself, nor the cost of this enormously expensive measure were considered at any stage of its passage through Parliament.

Subsequently, whenever I have questioned the economics of the UK’s climate change policies, governments have invoked the Stern Review. They still rely on it today.

It is claimed to have provided an independent review of the evidence on which government policy is based. It was in this context that I went back to the Stern Review, studied it at length and published an extended critique. In the course of this it became apparent that:
• The Stern Review was not independent. It was commissioned by the Chancellor of the Exchequer and carried out by a team of Treasury officials led by the Treasury Chief Economist, Sir Nicholas Stern.
• It was not a Review. Far from reviewing the evidence, and despite the fact that he did no new research of his own, Stern came out with conclusions way outside the previous consensus of environmental economists. That consensus included the economic assessment of the UN Intergovernmental Panel on Climate Change (IPCC) on whose scientific projections Stern’s projections were based. Whereas Stern said the benefits of reducing emissions would be 5–20 times the cost, the IPCC shortly afterwards concluded: ‘analyses of the cost and benefits of mitigation indicate that these are broadly comparable inmagnitude’ so it could not establish ‘an emissions pathway or stabilization level where benefits exceed costs’.
• Above all, it was not an exercise in evidence-based policy making but the most egregious example of policy-based evidence making. The Review selects facts and devises methods to justify a pre-ordained policy.
• Its principal conclusion – that the World should act to prevent the concentration of carbon dioxide in the atmosphere exceeding 550 parts per million – happened to be the target to which the UK government was already signed up (a fact never mentioned in the Report, which simply avoided considering any other target number).
• To justify the costly measures needed to reach that target, Stern had to set aside the discounting rules prescribed by the Government Economic Service (of which Stern himself was the head) and adopt a controversially near-zero rate for discounting over time the benefits of mitigating global warming centuries into the future (though not for discounting the costs of preventing it).
The near unanimous prior commitment of the political parties, the media and environmentalists to take ‘whatever action is required to save the planet’ guaranteed the Stern Review an uncritical reception in 2006. Academic criticism was deferred because the Review was launched some months before physical copies of the full report were made available.
When other environmental economists were able to study its rationale, the Review came in for some heavy criticism, particularly for its use of ultra-low discount rates (…) but also for a range of other questionable devices. …

After receiving a critical mauling from some fellow economists at a symposium at Yale, Stern has largely eschewed public debate with critics. Instead, he employs a full time ‘attack dog’ – one Bob Ward – who is tasked with launching ad hominem attacks and debating ripostes against anyone who has the temerity to question his master’s views.

In een economisch-technisch betoog rond de keuze van de rentevoet voor het op één noemer brengen van huidige en toekomstige kosten en baten (de berekening van de contante waarde), gaat Lilley voorts uitvoerig in op de kritiek van collega-economen van Stern, die de door hem gevolgde methode sterk hebben veroordeeld. In het licht daarvan verzette Stern de doelpalen en ontwikkelden hij en zijn team andere doemscenario’s waarbij massa-immigratie, internationale conflicten en gezondheidsrisico’, voortvloeiend uit de uitstoot van fijnstof die vrijkomt bij het verstoken van fossiele brandstoffen, een belangrijke rol speelden.

Lilley:

The flexibility with which Lord Stern has adapted his evidence, changed his theoretical rationale, developed more vivid threats and harnessed health consequences unrelated to carbon dioxide is impressive. But all these changes have been directed to buttressing his pre-ordained commitment to a programme of largely decarbonizing the economy by 2050. Not all these changes made it explicitly into his most recent opus restating his view. Nonetheless, that so much buttressing has been required might have raised doubts about the solidity of his original Review. Unfortunately, successive British governments continue to base their policy on the Review with unwavering faith.

En dan is er nog die kwestie van het opofferen van welvaart van hedendaagse armen voor de rijken van morgen.

Poor countries are more vulnerable to climate change – whether natural or man-made – because they are poor. The cure for poverty is growth, which requires energy. The cheapest form of energy at present is usually fossil fuels. Preventing or discouraging poor countries from using fossil fuels will slow their growth and prolong their poverty. On Stern’s ‘Business as usual’ scenario (that is, with no fresh steps to reduce carbon dioxide emissions) developing countries will account for the bulk of growth in emissions as the poorest two-thirds of theworld’s population catch up with the most developed nations. So Stern’s crash programme to limit emissions would involve major restraint by them even if developed countries decarbonise almost totally. …

Nonetheless, people in developing countries are still expected to have average levels of wellbeing more than 6 times their current incomes by 2100 and 20 times by 2200, when their incomes will be two-thirds higher than incomes of people in the industrialised world today. So, even in Stern’s worst case the higher incomes generated by harnessing energy from fossil fuels far outweigh the costs imposed on them by the resultant global warming.

In short, he wants to sacrifice the wellbeing of poor people today to benefit their far better off descendants a century or two hence. …

Conclusie

The Stern Review was a brilliant work of advocacy. It selected the methodology, facts and even ethical principles that supported a preconceived conclusion. It pleased those who were already convinced of the need for heroic measures to tackle global warming. But it evoked criticism from some economists that it exaggerated the costs of global warming and from some environmentalists that it presented no apocalyptic vision.

As a result, Stern has subsequently modified or abandoned his initial methodology; doubled his interest rate thus enormously reducing his original headline estimates of the cost of inaction; tightened his emissions target thereby doubling the cost of achieving it; adopted scarier visions of mass migration and conflict, which scarcely featured in the original report; and invoked health risks unrelated to carbon dioxide emissions. However, he continues to ignore the possibility of alternative pathways, higher emission targets, and greater reliance on adaptation. Changes on this scale should give pause for thought – especially as they all serve to buttress his original thesis or dramatise its message.

Moreover, Stern’s conclusions still require undue sacrifices from today’s poor to make wealthier future generations richer still and sacrifices from the UK which may prove futile if others do not emulate us.

It is time the government ceased to use the Stern Review to justify its climate change policy. They should commission a new and genuinely independent review.

Aldus Lilley.

In zijn bijdrage aan het rapport, getiteld, ‘Research in climate economics since the Stern Review’, schreef Richard Tol:

The Stern Review of the Economics of Climate Change was written by a team of civil servants at HM Treasury, led by Sir Nicholas H. Stern. Few if any of the team members had a prior publication record in climate economics. The Stern Review was launched to worldwide publicity by Prime Minister Tony Blair and Chancellor of the Exchequer Gordon Brownin November 2006. Headlines focussed on Stern’s estimates of the welfare impacts of anthropogenic climate change, which were high compared to previous studies and subsequent ones. The difference is by and large explained by Stern’s choice of discount rate, which was not only unconventionally low but also at odds with HM Treasury guidelines for which he was responsible as head of the Government Economic Service. The discount rate used by Stern, a former Chief Economist at the World Bank, also sharply deviates from the then practice at that institution. …

In June 2007, Sir Nicholas was appointed the I.G. Patel Professor of Economics and Government at the London School of Economics and Political Science, where in May 2008 he founded the Grantham Research Institute on Climate Change and the Environment, primarily funded by a charitable donation by the Grantham Foundation for the Protection of the Environment, and in September 2008 the Centre for Climate Change Economics and Policy (CCCEP), a joint centre with the University of Leeds, primarily funded by the Economic and Social Research Council.

Het ‘Grantham Institute’ heeft in de loop der jaren £31 miljoen aan subsidies en donaties bij elkaar weten te sprokkelen, maar is er niet in geslaagd om tot een ‘centre of excellence’ uit te groeien.

Richard Tol concludeert:

In summary, the economic study of climate change and climate policy has been transformed since 2006. Integrated assessment models have reached new levels of analytical sophistication, and a solid body of empirical research has emerged. However, the major changes in this field cannot be traced back to the publication of the Stern Review and the subsequent, substantial research grants to Stern. Although some new developments can be seen as a response to the Stern Review, the majority is independent of Stern’s work. Stern’s team have been followers in some of the changes in the profession, and leaders in none. In research terms, therefore, the Stern Review has a disappointing legacy.

Aldus Richard Tol.

Lees verder hier.

Voor allerlei grote projecten in ons land worden maatschappelijke kosten/batenanalyses (MKBA’s) uitgevoerd. Bij grote overheidsprojecten die de toekomst van een gebied bepalen, is een maatschappelijke kosten-baten analyse zelfs verplicht. Voor het grootste project in onze moderne geschiedenis dat een grote invloed heeft op de toekomst van ons hele land – het klimaatbeleid cum hernieuwbare energiebeleid – is dat echter tot dusver achterwege gebleven. Dus nog los van de vraag of de menselijke broeikashypothese al dan niet deugt (hetgeen, zoals op deze website voortdurend is betoogd, niet het geval is), is het hoog tijd dat dat alsnog gebeurt. De analyse van Lilley is daarvoor een uitstekend uitgangspunt. Sterker nog, die kan mutatis mutandis zonder meer worden overgenomen. Hoogste tijd dus voor een inhaalslag!

Voor mijn eerdere bijdragen over klimaat en aanverwante zaken zie hier, hier, hier, hier en hier.