From Fiona Harvey and Jim Pickard of the Financial Times
The Stern report on climate change underestimated the risks of global warming, its author said yesterday, 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 yesterday.
In retrospect, he would have taken a much stronger view in the report on the drastic changes that would occur if greenhouse gas emissions were not abated.
In the report, he put the costs of climate change at between 5 per cent and 20 per cent of global gross domestic product. But these would be far higher if the report had taken a more ag-gressive stance on 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 world’s leading climate scientists convened by the United Nations, published the most comprehensive study of climate change science. It predicted a temperature rise of 3°C 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° temperature increase are enormous. We can’t be precise about what it would be like but you can say it would be a transformation," he said.
But he defended his estimate of the cost of taking action on emissions – about 1 per cent of global GDP.
"Subsequent reports, [from] McKinsey, the International Energy Agency, the IPCC have pointed to the [Stern report’s] costs of action being roughly in the right ball park. Nothing [since] has led me to revise the cost of action.
"I probably would have emphasised the importance of good policy [if writing the report today] and how bad policy puts up the costs [of cutting emissions]."
Lord Stern has come under attack from economists and climate change sceptics since his report, which some sceptics regard as scaremongering. Some argued he underestimated the cost of taking action to cut emissions and overestimated the benefits to future generations.