Richard Tol takes issue with the Stern Report

I know this is kind of old news, but some people have taken issue with the Stern Report -- a report about the economic consequences of global warming.

Some of the people taking issue are those who are still skeptical that global warming is real. But some who are taking issue question the validity of Mr. Stern's numbers -- that they may be overestimating the economic impact.

One of the second group is economist Richard Tol who issued a critique of the report (available via Prometheus):

The Stern Review does not, in fact, present a formal cost-benefit analysis. Instead, it compares the magnitudes of the costs of abatement (around 1% of GDP) to the costs of climate change (5-20% of GDP) and concludes that the latter justifies the former. There are two mistakes here. Firstly, the costs of climate change do not equal the benefits of emission reduction - any abatement will only slow climate change rather than avoid it altogether - therefore, the benefits of emission reduction are smaller than the costs of climate change (Tol and Yohe, 2006). Secondly, marginal costs should be compared to marginal benefits, rather than total costs to total benefits. The Stern Review is silent on marginal abatement costs. It does report marginal damage costs though. For instance, it says "the mean value of the estimates in the study by Tol [2005] was about $29/tCO2" but omits that Tol (2005) concludes that "it is unlikely that the marginal damage costs of carbon dioxide emissions exceed $50/tC [$14/tCO2] and are likely to be substantially smaller than that." The Stern Review does report that "the current social cost of carbon [...] might be around $85/tCO2", but it does not provide any more detail - except that this number is preliminary and results from PAGE2002 (Hope, 2006). $85/tCO2 equals $314/tC, and is therefore an outlier in the marginal damage cost literature (Tol, 2005).


In sum, the Stern Review is very selective in the studies it quotes on the impacts of climate change. The selection bias is not random, but emphasizes the most pessimistic studies. The discount rate used is lower than the official recommendations by HM Treasury. Results are occasionally misinterpreted. The report claims that a cost-benefit analysis was done, but none was carried out. The Stern Review can therefore be dismissed as alarmist and incompetent.

This is not to say that climate change is not a problem, nor that greenhouse gas emissions should not be reduced. There are sound arguments for emission reduction. However, unsound analyses like the Stern Review only provide fodder for those skeptical of climate change and climate policy. (Emphasis mine.)

Read the whole thing. I am inclined to agree. What we need now is sound policy with accurate estimates of the costs and benefits of global warming abatement. Hysteria isn't good science, and it isn't good policy either.

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This lay reader went over the Tol review and found it wanting. The report has Stern's name on it, an economist and economic administrator of the highest and most general overview (World Bank Pres.), and is the product of a large group of scholars. It is a very big work. It was introduced by the Royal Society, not excactly a bunch of impressionable gadflies.

One can see contrary views as to this or that in it Which of the fields of science does not have controversies. But the stuffed shirt dismissal by Tol only signifies that this writer is distinctly out of it. His review is largely devoted to saying the Report relies on too much or this or too little of that, rather than outright claims of substantial error, and where he does claim error, he has been immediately refuted.Take a look at the extensive reivew of the reviews to be found in the blog Deltoid. Tol is like a man standing in the middle of the tracks reassuring everyone that no trains run on this line any more. I don't even want to watch.


I don't think that the credentials of whoever wrote a report should be used as a shield against criticism - we should judge purely on facts and reason.

Tol does have many years experience in the field, and the fact that he says that many of the Stern review's impact estimates only use the most pessimistic end of the range is worth listening to.

It's not about claiming error in an absolute sense - it's about pointing out where the Stern Review might have been selective.

I will check out the Deltoid blog comments, however.

Take a look at the extensive reivew of the reviews to be found in the blog Deltoid.

Tried looking for this, couldn't find it. If anyone could provide a hyperlink, that would be much appreciated.

Try Tim Lambert, the Australian math guy whose blog is Deltoid, also John Quiggan; and the listing and comments on reviews of Stern by Stoat (William Connally). You will find 30 plus references among this lot. Most of them are climate scientists, or concerned with climate, though Quiggan is an economist, and quite a few are deniers, bad company for your Tol.

Yes Tol has a long list of papers over decades, though i picked through a few and they are oddly small scale, and severely defined. Reminds me of the Czech short film that shows a kid on the beach making neat bucket shapes of sand by filling a bucket and turning it over. Then the view widens and you see thousands of neat bucket shapes. The kid is definitely limited and for sure will not be of much help when a tsunami comes, and boy has it come.

Everything counts, including credentials. And are you not relying on exactly that in your reference to Tol? I do not expect the men at Real Climate will bother with him, but heaven help him if they do.Connelly is even amused, and do you know, he can add. It is another bad mark that Tol has unloaded his views in Prometheus where a political scientist has been staging small group attacks on the rear of the climate scientists for a few years. In my view, Tol's ending remarks show spectacularly bad judgement. Now I do not want to bother working through any of his papers. Ah but then I am only a lay reader? Right, right, but if you are reaching for that you have a faltering argument.

Why would you have trouble finding Deltoid when it is listed in this page of this Blog with reference to Lambert's observance of Fumento careening into yet another car wreck. Look there (Deltoid) at the article "carter reckolns that just about wraps it up...". In Quiggan there is the most extensive commentary in quite a civilized thread (several of them in fact). There is also Quiggan's clear, balanced and apparently reasonable appreciation.
If you really are interested you can also take a look at the company Tol is keeping by viewing one of the most well funded and reactionary web pages to be found, the Cato Institutute and its column "Cato @ Liberty" (isn't that cute?) where Tol is cited along with Lomburg, the denialist recycler, and Pielke Jr. (of dubious fame at Prometheus). I find that Cato is more right wing (and very funny from my point of view) than the New American, the magazine of the John Birch Society, which is at least based on a sound understanding of American history. All that Cato really has to say is that Stern appears to take a cost that is too low and a damages that are too high. Wait a sec,I think that is what I said Tol said, and that it is not a sound basis for stuffed shirt dismissal. Now that I know that it is the opposite of what Cato approved from the likes of Lomburg and Pielke, how can I possibly be wrong?