OK, I’m desperately trying to understand Stern, and failing. Things just don’t seem to connect together properly. Possibly if I actually read the entire thing carefully… but who has the time. So, if anyone can explain to me:
Stern sez: Using the results from formal economic models, the Review estimates that if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more. But if you look at the damage-to-2100 from fig 6.5 (http://www.hm-treasury.gov.uk/media/8AC/CC/Chapter_6_Economic_modelling.pdf) *none* of the scenarios get to 5% mean damage by 2100. And if you take “at least” to mean “lower 5%-ile” then 1% damage is more plausible.
Figure 6.2 clearly shows that some models of economic effects show -ve damage for low T rise: up to 2 oC for one model. But by figure 6.5, all T levels lead to +ve damages. So some of these econ models have been thrown away. On what grounds?
[Update: JQ has an attempt to defend Sterns discount rates here (see linked preprint). I don’t find it convincing (nor does Tol) but it may be that there is rather more complexity to the choice than I thought. JA in the comments makes a bravce attempt to understand the issue.
To demonstrate how hard it is for the climate and econ side to talk together, JQ definitely gets it wrong when he says “A big problem with using Annan’s work to discuss Stern is that the two are talking about different things.” – they are, slightly, but that doesn’t stop it being relevant, and suggesting that Sterns numbers are too high. JQ talks around that a bit, but fails to get the point -W]