A Battle Over the Costs of Global Warming

Now that environmentalists and scientists are unanimous that human activities cause global warming, the debate has shifted to the cost and pace of slowing it down. Two sides have emerged among economists: those who support immediate action versus those who support gradual steps. Sir Nicholas Stern of the UK released a 700-page report in late 2006 that suggests global warming could rival World Wars I and II in disrupting national economies. After Yale economists questioned his analysis, Stern joined them for a debate and responded to the criticism. Differences among the economists center on the discount rate and the notion that the value of money erodes over time. During the debate, Stern agreed with Yale Professor William Nordhaus that the value of a dollar does erode, but that does not account for the increase in value of other entities – plant or animal species, fresh water or public lands. Some immediate steps, such as switching to energy from nuclear power plants, could cause more harm than good for the environment, warned Yale Professor Robert Mendelsohn. In the end, the many economists from the UK, Yale, Harvard and other universities agree that many uncertainties remain – about population growth, alternative technologies and people’s ability to adapt. Economists may disagree about costs, but the Stern Review has focused the world’s full attention on climate change. – YaleGlobal