Richard Tol has written a splendid riposte to Lord Stern's latest attempt to convince us that encumbering the economy with all manner of green "measures" will make us all richer.
The original Stern Review argued that it would cost about one percent of Gross Domestic Product to stabilise the atmospheric concentrations of greenhouse gases around 525 ppm CO2e. The Intergovernmental Panel on Climate Change puts the costs twice as high. Stern2.0 advocates a more stringent target, 450 ppm, and finds that this would accelerate economic growth.
This is implausible. Renewable energy is more expensive than fossil fuels. The rapid expansion of renewables is because they are heavily subsidised rather than because they are commercially attractive. The renewables industry collapsed in countries where subsidies were withdrawn. Raising the price of energy does not make people better off. Higher taxes, to pay for subsidies, are a drag on the economy.
Stern's magical thinking on climate economics has been disastrous for everyone, except perhaps for the man himself, who has become rich on the back of his forays into the climate debate. History will not be kind to him.
Postscript: Tol's article is also posted at the Conversation, where Stern supporters seem unable to respond with rational argument, heading straight for the ad-hominem offensive.