Lord Stern also deployed (still does) a low, nearly zero discount rate which deflates costs and inflates benefits of the raft of fixes he's been promoting ever since. These folks have never met an ethical bar they couldn't creep under. They've gotten away with it all these years because groupthink and peer pressure let them (those elites you wrote about not long ago).
For comparing utilities today va the far future a zero _time preference_ makes a lot of sense. Tyler Cowen does the same thing
A dollar saved today is worth more thaa a dollar saved in thefar future IS OK becase capital is productive. The way to deal that is with shadow price of capital.
A dollar not consumed today is worth more than a dollar not consued in thefarfuture becasue unless we screw up badly, people in th efar future will be far richer tht we and so declining marginal utilityof income.
disagree, hugely. if it is only private capital, sure, go ahead, have fun. but these are public expenditures with taxpayer dollars. in those cases, low to zero discount rates bias investment decisions and inflate perceptions of capital productivity. in the case of the US, there is a direct link between those distortions and the fights around exposure in which Roger and others are enmeshed - zero time pref at Bur of Rec and during Roosevelt’s New Deal supported enormous investments in dams across the West that were intended to support economic development in the Western states and hasten exit from the Depression. The mega urban areas that emerged have resulted in people and property being in exactly the wrong places - drought and wildfire prone areas that increase risk exposure and casualty losses. the moral hazard that we've ended up with is one of the dumber consequences of public finance that improperly prices cost of capital and risk.
Precicely becasue it is public money that we should look at non-maket elements: time preference and the value of consumption of richer future people compared to consumption now.
The only think unfortunate about Western water projets is the mis-pricing of the water. The Investments were well timed; alternive uses of the capital and labor were low.
Author Nicholas Stern was Chairman of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.
That institute was founded by money manager Jeremey Grantham who is a long time climate activist. Presumably Stern wrote an alarmist review at the instruction of his paymaster.
Matt Yglesias has a post today about the error of attributing bad motives, especially "corrumpiong" for viesw they disagree with. His target was mainly the Left but the Right also do it.
When I was trained in classical science (back when my hair was still black, and dinosaurs still roamed the earth), when using a data set, we were instructed to interpolate with caution, and NEVER extrapolate. This dictum seems to have been lost in the sands of time. The Stern Review is a classical case of extrapolation error.
You are being far too kind. This isn't an extrapolation error, this is at best a colossal mistake in reading comprehension or at worst outright scientific fraud. As Roger notes, "The Stern Review seems to have turned 1% into 2% and failed to acknowledge that over the longer-period 1950 to 2005, there was no increasing trend in losses as a proportion of GDP."
Turning 1% into 2% is not a mistake in extrapolation, and selectively choosing preferred time periods to give the results that you want is classic cherrypicking.
An excellent article that clarifies another building block of climate alarmism.
However, the term “bad science” is inaccurate in this case. Bad science involves poor skills and poor results but does not imply bad intentions. The problem, as eloquently shown by Roger, is not just that the Stern report got the its predictions wrong, but that it made highly alarmist predictions on no scientific basis whatsoever, with obvious and immediate political consequences. This is called fraud, and specifically a fraud aided and abetted by the climate science community, who not only failed to recognize the lack of scientific basis but also ignored for almost two decades a peer-reviewed paper that set the record straight.
In any normal, civilized countries, a far-reaching, expensive fraud gets investigated. Who commissioned the fraud? Who directly benefited from it? Who supported it, even tacitly? Why would this stop as long as there are no consequences? Is it surprising or untrue when some people call the handling of climate change in the last decades a hoax (not the possible anthropogenic influence on climate)?
Stern's error is more fundamental. He did not proceed from a scientific etimate of geophysical effects and then cost out those effects. (That is where Roger's work comes becomes relevant, in costing the geophysical effects. It is not bad science but a failure to use any science at all.
Thank you Roger. You write- " a more significant outcome of this episode, and a key part of my own education in climate science, is that my paper was resoundingly ignored... One reason that science works is that scientists share a commitment to correct errors when they are found in research, bringing forward reliable knowledge and leaving behind that which doesn’t stand the test of time...I learned decades ago that in areas where I published, self-correction was often slow to work, if not just broken. Over the decades that pathological characteristic of key areas of climate science has not much improved..." And that's an understatement!
Here's my DuckGoGo AI evaluation now, 20 years later- "Key Predictions and Their Outcomes Prediction-
Original Claim (2006) Current Evaluation (2026) Cost of Inaction
Climate change could cost at least 5% of global GDP annually if unaddressed. Emerging estimates suggest costs may be higher, approaching 20% with various factors considered".
As DuckGoGo might more accurately say- quack, quack, quack.
I believe the connotation “bad science” needs to changed as those who participate are not doing anything that is close to science. E.g. Alchemist. Were not into bad science they were quacks and the name came to be symbolic of what they really were doing which was not science.
In order to “trust the science “ you need to be able to “trust the scientists “ in today’s politically and ideologically divided world that is becoming increasingly difficult.
The Stern scam was a deliberate and successful effort to justify the massive transfer of wealth to "green" schemes that would never work. Thank you for confronting this terrible work of fiction.
As a climate scientist at the time trying to grow a program of sustained processing of observations, my group initially embraced the Stern report. However, I really had no experience in economic modeling and so I asked my group to dig in to the Stern report and put together a simple model of how it worked. We discovered the Stern model was very sensitive to the 'discount rate' going forward. We could tweak the discount rate and get widely different results. Given the discount rate had large uncertainty, we backed off promoting the Stern report. That is when I started reading more of your posts Roger.
Thank you for you dedication to real science despite the high cost of 'unpopular' opinions. Truth will out.
Actuaries and pension fund managers understand the effects of different discount rates because their jobs have accountability. Economist, climate scientists, and policy makers, not so much. The long sought solution, and true social justice, is for academics and policy makers to be similarly accountable. Your new venture makes you accountable, best of luck and science.
A fun wrinkle with the discount rate is that if you also use a low discount rate for your energy choice, nuclear rapidly becomes the most economical source. I think this does make sense in the real world as well, as a slower transition with more nuclear would benefit from having several decades of low cost plant operation after capital costs are paid down. This can be seen in France supporting an affordable, low carbon and relatively electrified grid
The important point of the Stern report is the methodology of deriving economic costs, and by extention, the costs that are worthwhile to exert to avoid climate costs. The specific model linking net emissions of CO2 to CO2 concentrations, to geophysical effects from which economic costs are deriveded should be expeced to change as data and modeling advance. "Modeling" outcomes with trend lines is not modling the efects of CO2 emissions at all.
Even if the Stern report relied on a model that gave inordinant (and eronious estimates) of the cost of weather disasters, those are only one kind of geophusical change.
Botom line, who should do what when to produce and continually update proper emissions => accumulation => climate effects => costs models? It is not enugh to curse (or even calmly and scientifically analyse) the darkness. Light a candel.
??? Why? If we have the hard scientific model linking CO2 emisions => CO2 accumulation => geophysical effects wny would costing out different CO2 emissions trajectories be meaninfful? The link just points out that the geophyscal models yield a range of uncertainty.
I do not disagree. But decisino-making under uncertainty did not start with geophysical climate models. In pracitcal terms I'd say take most optimiatic estimate and aim least cost net CO2 emissions policy at that. f later maoding with more data [folloing your ideas about how the modeling _should_ be done] shifts the estimates higher or lower we accept more higher or lower cost policies. In the simplist terms, adopt a trajectory of tax on net emisions that get to the CO2 concentration that optimises for the low cost senario and increase it late if needed.
Stern was rewarded with a seat in the UK House of Lords!
I am a PhD earth scientist who has followed the journey of this climate delusion since the beginning, and my admiration for Roger's fortitude, resilience, and patience. is boundless. The central issue is the make-believe of so much human behaviour, it is actually a genetic problem.
Humans crave certainty. Predictability. Control. The brain doesn't like uncertainty (paging Daniel Kahneman, among others), and politicians and other hucksters are happy to provide it.
IIRC, Virginia Postrel, decades ago, in her book The Future and Its Enemies made a great case for how acceptance of an open-ended future, and thus the freedom and innovation that allows progress to blossom, results in a much higher SOL for humans than modes where politicians etc were trying to control or engineer "good" outcomes. The irony was that by telling people we can control the future to make it better, we actually make it worse than it could have been.
Lord Stern also deployed (still does) a low, nearly zero discount rate which deflates costs and inflates benefits of the raft of fixes he's been promoting ever since. These folks have never met an ethical bar they couldn't creep under. They've gotten away with it all these years because groupthink and peer pressure let them (those elites you wrote about not long ago).
For comparing utilities today va the far future a zero _time preference_ makes a lot of sense. Tyler Cowen does the same thing
A dollar saved today is worth more thaa a dollar saved in thefar future IS OK becase capital is productive. The way to deal that is with shadow price of capital.
A dollar not consumed today is worth more than a dollar not consued in thefarfuture becasue unless we screw up badly, people in th efar future will be far richer tht we and so declining marginal utilityof income.
Ethics has nothing to do with it.
{Mistaken "like," Roger] :)
disagree, hugely. if it is only private capital, sure, go ahead, have fun. but these are public expenditures with taxpayer dollars. in those cases, low to zero discount rates bias investment decisions and inflate perceptions of capital productivity. in the case of the US, there is a direct link between those distortions and the fights around exposure in which Roger and others are enmeshed - zero time pref at Bur of Rec and during Roosevelt’s New Deal supported enormous investments in dams across the West that were intended to support economic development in the Western states and hasten exit from the Depression. The mega urban areas that emerged have resulted in people and property being in exactly the wrong places - drought and wildfire prone areas that increase risk exposure and casualty losses. the moral hazard that we've ended up with is one of the dumber consequences of public finance that improperly prices cost of capital and risk.
Precicely becasue it is public money that we should look at non-maket elements: time preference and the value of consumption of richer future people compared to consumption now.
The only think unfortunate about Western water projets is the mis-pricing of the water. The Investments were well timed; alternive uses of the capital and labor were low.
Author Nicholas Stern was Chairman of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.
That institute was founded by money manager Jeremey Grantham who is a long time climate activist. Presumably Stern wrote an alarmist review at the instruction of his paymaster.
Matt Yglesias has a post today about the error of attributing bad motives, especially "corrumpiong" for viesw they disagree with. His target was mainly the Left but the Right also do it.
When I was trained in classical science (back when my hair was still black, and dinosaurs still roamed the earth), when using a data set, we were instructed to interpolate with caution, and NEVER extrapolate. This dictum seems to have been lost in the sands of time. The Stern Review is a classical case of extrapolation error.
You are being far too kind. This isn't an extrapolation error, this is at best a colossal mistake in reading comprehension or at worst outright scientific fraud. As Roger notes, "The Stern Review seems to have turned 1% into 2% and failed to acknowledge that over the longer-period 1950 to 2005, there was no increasing trend in losses as a proportion of GDP."
Turning 1% into 2% is not a mistake in extrapolation, and selectively choosing preferred time periods to give the results that you want is classic cherrypicking.
An excellent article that clarifies another building block of climate alarmism.
However, the term “bad science” is inaccurate in this case. Bad science involves poor skills and poor results but does not imply bad intentions. The problem, as eloquently shown by Roger, is not just that the Stern report got the its predictions wrong, but that it made highly alarmist predictions on no scientific basis whatsoever, with obvious and immediate political consequences. This is called fraud, and specifically a fraud aided and abetted by the climate science community, who not only failed to recognize the lack of scientific basis but also ignored for almost two decades a peer-reviewed paper that set the record straight.
In any normal, civilized countries, a far-reaching, expensive fraud gets investigated. Who commissioned the fraud? Who directly benefited from it? Who supported it, even tacitly? Why would this stop as long as there are no consequences? Is it surprising or untrue when some people call the handling of climate change in the last decades a hoax (not the possible anthropogenic influence on climate)?
Stern's error is more fundamental. He did not proceed from a scientific etimate of geophysical effects and then cost out those effects. (That is where Roger's work comes becomes relevant, in costing the geophysical effects. It is not bad science but a failure to use any science at all.
Like you I recognised that the Stern Review was policy based evidence not evidence based policy:
https://www.peterlilley.co.uk/pdfs/whatiswrongwithstern.pdf
I remember! And that too has aged well . . .
The Stern Review certainly hasn’t aged well. Thank you for circling back on that once again.
Thankfully, being ignored in 2007 did not discourage you.
Thank you Roger. You write- " a more significant outcome of this episode, and a key part of my own education in climate science, is that my paper was resoundingly ignored... One reason that science works is that scientists share a commitment to correct errors when they are found in research, bringing forward reliable knowledge and leaving behind that which doesn’t stand the test of time...I learned decades ago that in areas where I published, self-correction was often slow to work, if not just broken. Over the decades that pathological characteristic of key areas of climate science has not much improved..." And that's an understatement!
Here's my DuckGoGo AI evaluation now, 20 years later- "Key Predictions and Their Outcomes Prediction-
Original Claim (2006) Current Evaluation (2026) Cost of Inaction
Climate change could cost at least 5% of global GDP annually if unaddressed. Emerging estimates suggest costs may be higher, approaching 20% with various factors considered".
As DuckGoGo might more accurately say- quack, quack, quack.
I believe the connotation “bad science” needs to changed as those who participate are not doing anything that is close to science. E.g. Alchemist. Were not into bad science they were quacks and the name came to be symbolic of what they really were doing which was not science.
In order to “trust the science “ you need to be able to “trust the scientists “ in today’s politically and ideologically divided world that is becoming increasingly difficult.
The Stern scam was a deliberate and successful effort to justify the massive transfer of wealth to "green" schemes that would never work. Thank you for confronting this terrible work of fiction.
As a climate scientist at the time trying to grow a program of sustained processing of observations, my group initially embraced the Stern report. However, I really had no experience in economic modeling and so I asked my group to dig in to the Stern report and put together a simple model of how it worked. We discovered the Stern model was very sensitive to the 'discount rate' going forward. We could tweak the discount rate and get widely different results. Given the discount rate had large uncertainty, we backed off promoting the Stern report. That is when I started reading more of your posts Roger.
Thank you for you dedication to real science despite the high cost of 'unpopular' opinions. Truth will out.
Actuaries and pension fund managers understand the effects of different discount rates because their jobs have accountability. Economist, climate scientists, and policy makers, not so much. The long sought solution, and true social justice, is for academics and policy makers to be similarly accountable. Your new venture makes you accountable, best of luck and science.
A fun wrinkle with the discount rate is that if you also use a low discount rate for your energy choice, nuclear rapidly becomes the most economical source. I think this does make sense in the real world as well, as a slower transition with more nuclear would benefit from having several decades of low cost plant operation after capital costs are paid down. This can be seen in France supporting an affordable, low carbon and relatively electrified grid
Good post, but I think it misses some points.
The important point of the Stern report is the methodology of deriving economic costs, and by extention, the costs that are worthwhile to exert to avoid climate costs. The specific model linking net emissions of CO2 to CO2 concentrations, to geophysical effects from which economic costs are deriveded should be expeced to change as data and modeling advance. "Modeling" outcomes with trend lines is not modling the efects of CO2 emissions at all.
Even if the Stern report relied on a model that gave inordinant (and eronious estimates) of the cost of weather disasters, those are only one kind of geophusical change.
Botom line, who should do what when to produce and continually update proper emissions => accumulation => climate effects => costs models? It is not enugh to curse (or even calmly and scientifically analyse) the darkness. Light a candel.
Noah Kaufman has a good essay on the economic costs of climate change, which I linked too recently at THB.
In short. Sure producing estimates of costs can be done. But do they mean anything? No.
https://www.theatlantic.com/science/2026/01/climate-economics/685609/
??? Why? If we have the hard scientific model linking CO2 emisions => CO2 accumulation => geophysical effects wny would costing out different CO2 emissions trajectories be meaninfful? The link just points out that the geophyscal models yield a range of uncertainty.
What aspect of Kaufman’s argument do you disagree with specifically?
I do not disagree. But decisino-making under uncertainty did not start with geophysical climate models. In pracitcal terms I'd say take most optimiatic estimate and aim least cost net CO2 emissions policy at that. f later maoding with more data [folloing your ideas about how the modeling _should_ be done] shifts the estimates higher or lower we accept more higher or lower cost policies. In the simplist terms, adopt a trajectory of tax on net emisions that get to the CO2 concentration that optimises for the low cost senario and increase it late if needed.
What do you say?
Thanks for the diligent reporting.
It seems they are still at it, even doubling down on the bad science. Typically in examining these types of things - follow the money.
No wonder the UK and EU economies are bad and getting worse.
https://www.lse.ac.uk/granthaminstitute/news/new-report-lays-out-feasible-path-to-mobilising-external-finance-of-us1-3-trillion-annually-by-2035-for-climate-investments-in-developing-countries/#:~:text=The%20report%20explains%20that%20emerging,in%20EMDEs%20other%20than%20China.
Stern was rewarded with a seat in the UK House of Lords!
I am a PhD earth scientist who has followed the journey of this climate delusion since the beginning, and my admiration for Roger's fortitude, resilience, and patience. is boundless. The central issue is the make-believe of so much human behaviour, it is actually a genetic problem.
Humans crave certainty. Predictability. Control. The brain doesn't like uncertainty (paging Daniel Kahneman, among others), and politicians and other hucksters are happy to provide it.
IIRC, Virginia Postrel, decades ago, in her book The Future and Its Enemies made a great case for how acceptance of an open-ended future, and thus the freedom and innovation that allows progress to blossom, results in a much higher SOL for humans than modes where politicians etc were trying to control or engineer "good" outcomes. The irony was that by telling people we can control the future to make it better, we actually make it worse than it could have been.
PS REASON was awesome when she ran it.