II.  Reports


The   author   wishes   to   make   it   plain   that   while   he   possesses   degrees   in   classics   (MA,   Oxon),   mathematics   (BSc, Open)   and   New   Testament   History   (PhD,   Wales,   Lampeter),   he   boasts   no   qualifications   whatever   in   either   science (beyond   ‘A’   level   physics)   or   economics.   He   does   however   have   extensive   experience   in   mathematical   modelling and   operational   research   in   scientific   fields,   with   several   classified   reports   produced   under   MoD   defence   contracts, mostly in avionics.


In   his   groundbreaking   study   Stern   Review   on   the   Economics   of   Climate   Change    (2006),   Sir   Nicholas   Stern   employed as   his   model   for   discounting   the   future   a   well-known   equation   first   published   by   F.P.   Ramsey   in   1928.   This   equation makes   use   of   two   constants   representing   ethical   choices   whose   values   need   to   be   determined   for   each   application. Those   used   by   Stern   have   been   challenged   by   critics   in   terms   of   the   ethical   assumptions   on   which   they   were   based, and   subsequently   defended   by   him,   his   team   and   others.   It   would   appear   that   i n   terms   of   his   application   of   Ramsey’s discounting   equation   Lord   Stern   wins   his   case .   However,   it   may   be   questioned   whether   the   equation   is   itself adequate   for   the   task   for   which   it   is   being   used.   What   is   required   is   a   wholesale   transformation   of   our   contemporary approach   to   technology.   The   international   action   strongly   urged   by   the   Review    requires   a   firmer   metaphysical foundation for this, such as that offered by Plato.


In   2005   Sir   Nicholas   Stern   was   asked   by   Chancellor   Gordon   Brown   to   conduct   a   major   review   of   the   economics   of climate   change   as   a   guide   to   developing   government   policy.   Sir   Nicholas,   now   Professor   Lord   Stern,   was   a   well- respected,   established   economist   who   has   been   the   chief   economist   at   the   World   Bank,   the   second   permanent secretary   of   HM   Treasury,   and   the   head   of   the   (UK)   Government   Economic   Service.   His   Review ,   released   in   late 2006,   expressed   alarm   at   the   impending   climate   damages   that   would   result   from   ‘business   as   usual’,   and   presented novel   economic   arguments   endorsing   ‘strong,   immediate   action   in   the   form   of   about   1   per   cent   of   GDP   in   order   to thwart   the   possibility   of   damages   amounting   to   as   much   as   “20   per   cent   of   GDP”…under   business   as   usual.’ [1]    It   was soon   criticised   by   a   number   of   other   economists,   alarmed   by   the   striking   difference   between   Stern   and   the   majority of   preceding   economic   analyses,   which   tended   to   recommend   much   smaller   and   slower   responses.   Central   to   the argument lay the discount rate  adopted by Stern and his team. Ackerman puts it as clearly as any: For   economists,   calculation   of   future   costs   and   benefits   routinely   involves   a   discount   rate.   The   logic   of discounting   starts   from   the   fact   that   money   today   is   worth   more   than   the   same   amount   of   money   next   year, or   farther   into   the   future   (even   if   there   is   no   inflation).   No   financial   institution   makes   zero-interest   loans,   in which   you   pay   back,   in   the   future,   exactly   what   you   borrowed   in   the   past.   If   you   could   borrow   money   at   a   3% interest   rate,   getting   £100   today   would   cost   you   £103   a   year   from   now.   To   express   current   and   future   costs and   benefits   on   a   comparable   basis,   economists   discount   future   amounts,   converting   them   to   the   equivalent present   value .   At   a   3%   discount   rate,   £103   a   year   from   now   has   a   present   value   of   £100.   (Ackerman   2007, 4) Because   the   climate   impacts   of   today’s   decisions   span   such   long   periods   of   time,   the   choice   of   a   discount rate   is   one   of   the   most   important   factors   in   the   economic   analysis   of   climate   change.   Stern’s   preferred discount   rate,   1.4%...,   is   much   lower   than   the   rates   used   in   traditional   climate   economic   models.   For   William Nordhaus,   “the   Review ’s   radical   revision   arises   because   of   an   extreme   assumption   about   discounting…this magnifies   enormously   impacts   in   the   distant   future   and   rationalizes   deep   cuts   in   emissions,   and   indeed   in   all consumption,    today.” [2]     As    Nordhaus    suggests,    a    lower    discount    rate    makes    the    far    future    look    more important today, and supports greater future-oriented investment. In    selecting    the    appropriate    discount    rate    for    long-term    public    policy    decisions,    economic    theory    often distinguishes   between   two   components.   The   rate   of   pure   time   preference   is   the   discount   rate   that   would apply   if   all   present   and   future   generations   had   equal   resources   and   opportunities….In   addition,   there   is   a wealth-based   component   of   the   discount   rate,   reflecting   the   assumption   that   if   future   generations   will   be richer   than   we   are,   then   there   is   less   need   for   us   to   invest   today   in   order   to   help   them   protect   themselves.   In the notation of the Stern Review , the discount rate , r , is the sum of these two parts: r = d + ηg Here   d    (delta)   is   the   rate   of   pure   time   preference ,   and   g    is   the   growth   rate   of   per   capita   consumption.   If   per capita   consumption   is   constant,   implying   that   g   =   0,   then   the   discount   rate   r   =   d .   The   second   parameter,   η (eta),   determines   how   strongly   economic   growth   affects   the   discount   rate.   A   larger   value   of   η   implies   a   larger discount    rate,    and    hence    less    need    to    provide    today    for    future    generations    (as    long    as    per    capita consumption is growing). (Ackerman, 2007, 4) This   equation   for   discount   rate   of   consumption   r   –   that   is,   the   rate   of   fall   of   the   discount   factor   –   reflects   the ethical   framework,   standard   in   modern   economics,   known   as   Classical   Utilitarianism,   and   was   first   published in   1928   by   F.P.   Ramsey,   Professor   of   Mathematics   at   King’s   College,   Cambridge   (brother   of   the   Archbishop). It was in use before Stern, and is prescribed for government use today in the Treasury Green Book (2011). [3] In the Review d has two components, catastrophe risk and pure time preference, or pure time discount rate, which today are commonly separated, as in the Treasury Green Book (2011): The   first   component,   catastrophe   risk ,   is   the   likelihood   that   there   will   be   some   event   so   devastating   that   all returns   from   policies,   programmes   or   projects   are   eliminated,   or   at   least   radically   and   unpredictably   altered. Examples   are   technological   advancements   that   lead   to   premature   obsolescence,   or   natural   disasters,   major wars etc. The scale of this risk is, by its nature, hard to quantify. The   second   component,   pure   time   preference ,   reflects   individuals   preference   for   consumption   now,   rather than later, with an unchanging level of consumption per capita over time. (Green Book, 2011) In this latter sense d describes a lower weight on the future, simply because it is in the future. Cole explains: Virtually   everyone   would   rather   receive   a   dollar   today   than   a   dollar   tomorrow   or   five   years   from   now.   A   dollar in   hand   today   can   be   invested   at   some   positive   rate   of   interest   so   that   it   will   be   worth   more   than   a   dollar tomorrow   and   worth   much   more   than   a   dollar   five   years   from   now.   The   " pure   rate   of   time   preference "   or " utility   discount   rate "   is   an   estimate   of   the   interest   rate   at   which   individuals   discount   the   value   of   money   over time. The   Review   proposes   a   catastrophe   risk   –   the   possibility   of   extinction   of   the   human   race   –   of   0.1%.   At   this   rate   Stern computes   that   the   human   race   has   a   probability   of   0.095   of   not   surviving   100   years.   At   the   same   time   he   sets   the pure rate of time preference to zero. This gives a total d  = 0.1%. (Review 2A.1, 47) Defining   c   as   the   marginal   utility   of   consumption   gives   c’/c   as   the   growth   rate   of   consumption,   denoted   nowadays   by g. Then η as the elasticity of the marginal utility of consumption, of which Stern writes: In   this   context   [η]   is   essentially   a   value   judgement.   If,   for   example   η=1,   then   we   would   value   an   increment   in consumption   occurring   when   utility   was   2c   as   half   as   valuable   as   if   it   along   the   path:   this   is   a   specification   of the   path   itself   or   the   scenario   or   forecast   of   the   path   of   consumption   as   we   look   to   the   future.   (Review, 2A.1,.46) Then the Review opts for η = 1%, g = 1.3, d = 0.1%, giving r = 1.4%[4] These low values of η and d are what give us the low r. On this basis, Stem   calculates   that   by   investing   one   percent   of   annual   global   GDP   starting   now   and   continuing   potentially forever,   the   world   could   avert   costs   to   annual   global   GDP   of   ten   percent   "forever."   In   the   "worst   case," climate   change   mitigation   would   yield   net   costs   amounting   to   3.4   percent   of   annual   global   GDP.   In   the   "best case," climate change mitigation would add 3.9 percent net to annual global GDP. (Cole 2008, 62)


By   any   standards   the   Review    is   a   monumental   achievement,   encompassing   as   it   does   so   much   scientific   data together   with   economic   analysis   and   strategic   proposals.   However,   he   has   received   some   merciless   treatment   at   the hands   of   critical   fellow-economists,   who   include   Dasgupta   (2007),   Nordhaus   (2007)   and   Weitzman   (2007).   As Ackerman puts it, In   the   opinion   of   a   number   of   economists   who   have   discussed   the   Stern   Review ,   these   criticisms   invalidate Stern’s   conclusion   that   the   costs   of   climate   mitigation   are   much   smaller   than   the   benefits.   (Ackerman   2007, 3) The problem is confused by the fact that the exact interpretation of d and h varies between commentators. Dasgupta, for instance, interprets   d    as   the   measure   of   the   trade-off   between   present   and   future,   independent   of   wealth   differences, and   η   as   the   measure   of   the   trade-off   between   rich   and   poor,   independent   of   time   differences.   In   this framework, η = 0 implies that every pound is of equal value regardless of who receives it; η = 1 implies that every 1% increase in a person’s income is of equal value regardless of the wealth of the person who receives it; and η > 1 implies that a 1% increase in income is of greater value to a poorer person. Dasgupta   endorses   Stern’s   argument   that   d    is   close   to   zero,   but   maintains   that   equity   requires   much   more concern   for   the   poor,   reflected   in   a   larger   η;   Dasgupta   suggests   a   range   of   2   to   4.   (Ackerman   2007,   6, summarising Dasgupta, 2007, 3-7) Daniel   H.   Cole   (2008)   gives   a   sustained   and   measured   evaluation   consideration   of   the   state   of   play   between   Stern and his critics, in terms of conformity by the Review  to “best practice” of BCAs (Benefit Cost Analyses). He asks, Is d = 0.1 too low?, and η = 1 too low? On the first of these he cites on p.66 the view of William Nordhaus, who concludes   that   the   Stern   Review's   choice   of   a   very   low   d,   more   than   any   other   factor,   explains   why   the   Stern Review's results differ so dramatically from those of other climate change BCAs, including his own: The   Review   proposes   ethical   assumptions   that   produce   very   low   discount   rates.   Combined   with other    assumptions,    this    magnifies    impacts    in    the    distant    future    and    rationalizes    deep    cuts    in emissions,   and   indeed   in   all   consumption,   today.   If   we   substitute   more   conventional   discount   rates used    in    other    global-warming    analyses    by    governments,    by    consumers,    or    by    businesses,    the Review's dramatic results disappear.... (Nordhaus 2007, 689) Cole defends Stern’s choice of η = 1 by pointing out that [t]he   η   actually   combines   three   distinct   valuations   within   a   single   number:   (1)   a   measure   of   risk   aversion,   (2) a   judgment   about   the   extent   of   static   income   inequality   among   different   people,   and   (3)   a   judgment   about   the extent of dynamic income inequality for individuals over time. (Cole, 2008, 71) Because of this it is hard to fault Stern’s choice of value, since the temptation to assign inconsistent values to η is understandable given the variety of potentially inconsistent judgments that η incorporates. (Ibid.) Cole   then   disarms   all   of   Stern’s   critics   who   attack   him   for   his   choice   on   individual   values   of   d ,   η   or   g,   since   Ramsey’s equation   makes   r   a   function   of   all   three.   The   same   value   for   r   could   result   from   any   number   of   different   combinations of   d ,   η   and   g.   Nevertheless   this   does   suggest   a   number   of   weaknesses   in   the   present   day   application   of   BCA analyses generally, noted particularly by Weitzman, who also   doubts   the   ability   of   Stem   or   any   other   economic   analyst   to   perform   such   calculations   given   the   current state of economic science. (Cole, 2008, 76) In Weitzman’s own words: trying   to   forecast   costs   and   benefits   of   climate   change   scenarios   a   hundred   years   or   so   from   now   is   more   the art   of   inspired   guesstimating   by   analogy   than   a   science   (imagine   forecasting   today's   world   a   century   ago). (Weitzman, 2007, 715) Cole continues: Is   Weitzman   suggesting   that   "state   of   the   art"   economic   analysis   is   not   yet   up   to   the   task   of   dealing   with   a problem   as   potentially   large   and   long-term   as   climate   change?   The   last   three   sections   of   Weitzman's   review of the Stern Review suggest that the answer to this question is a qualified yes. The   problem,   in   a   nutshell,   is   the   wide   range   of   possible   temperature   increases   under   the   IPCC's   most current   climate   change   models,   including   a   five-percent   possibility   that   temperature   increases   will   equal   or exceed   6°C   and   a   two-percent   probability   of   increases   equal   to   or   greater   than   8°C   within   the   next   100   to 200   years.   Weitzman   notes   that   "any   honest   economic   modeler   would   have   to   admit"   to   complete   uncertainty about   the   social,   economic,   and   environmental   effects   of   such   a   temperature   increase   because   "such   high temperatures have not existed for some tens of millions of years.” (Cole, 2008, 75) Moreover,   Stern   and   his   team   have   provided   robust   defences   of   their   own   methodology   (Dietz   and   Stern,   2008; Dietz, Hope Stern, Zenghelis, 2008), justifying their choices of d  and η in terms of their ethical stance.


Ackerman summarises the discounting debate as follows: On   discounting,   the   choices   of   both   d    and   η   affect   the   discount   rate.   The   choice   of   pure   time   preference   ( d )   is an   ethical   question,   involving   the   value   placed   on   the   intrinsic   wellbeing   of   future   generations,   independent   of income.   Stern   favors   a   much   lower   value   than   most   (not   all)   other   economists,   but   the   choice   is   not   a   matter of   technical   analysis.   Rather,   as   the   Review    puts   it,   “if   you   care   little   about   future   generations   you   will   care little   about   climate   change.   As   we   have   argued   that   is   not   a   position   which   has   much   foundation   in   ethics…[It is   a   position]   which   many   would   find   unacceptable.”   [5]    To   quantify   an   ethical   perspective   that   respects   and validates the future, it is essential to set pure time preference close to zero. Regarding   the   choice   of   the   second   parameter,   η,   involving   the   value   placed   on   changes   in   wealth,   the arguments   are   less   clear.   Sensitivity   analyses   show   that   the   exact   Stern   Review    value   of   η   is   not   crucial   to the   general   conclusions,   i.e.   that   the   benefits   of   active,   immediate   mitigation   outweigh   the   costs.   (In   this context,   recall   Arrow’s   conclusion   that   the   benefits   exceed   the   costs,   even   with   η   =   2   and   a   much   higher   rate of pure time preference.)… In   short,   whenever   there   are   data   sufficiently   precise   to   justify   discounting…,   Stern’s   general   arguments   for   a low   discount   rate   are   persuasive .   As   Weitzman   and   others   have   noted,   this   alone   could   be   sufficient   to   flip the   outcome   of   cost-benefit   analysis:   the   high   discount   rates   favoured   by   many   economists   seem   to   justify doing   very   little   for   now;   Stern’s   low   discount   rate,   applied   to   the   same   data,   endorses   doing   much   more, much sooner. (Ackerman 2008, 16; emphasis added.) Cole likewise writes positively on the discounting issue: Perhaps   the   most   obvious   lesson   from   the   Stern   Review   and   its   critics…is   that   the   choice   of   parameter values   [including   d ,   η   and   g ]   can   decisively   influence   the   outcome   of   BCAs.   Unfortunately,   the   Stern   Review and   its   critics   also   remind   us   of    just   how   far   away   we   remain   from   being   able   to   specify   a   consensus   "best practice"   for   selecting   parameter   values .   Many   (though   by   no   means   all)   reviewers   complain   that   the   Stern Review's   choice   of   a   0.1   percent   pure   rate   of   time   preference   is   too   low.   This   assessment   is   supported   by two   reasons:   (a)   such   a   low   discount   rate   ignores   how   people   actually   behave   in   markets   and   (b)   it   deviates significantly   from   a   "conventional   range"   of   discount   rates   in   the   BCA   literature.   These   assertions   are   both true,   and   yet   t hey   do   not   warrant   a   conclusion   that   Stem's   choice   of   discount   rate   was   "wrong"   or   violated some "best practice" of BCA . (Cole 2008, 81, emphasis added). Also: Sir   Nicholas   Stem,   as   lead   author   of   the   Stem   Review,   has   also   made   himself   available   for   conferences   and meetings   devoted   to   criticizing   his   Review.   For   example,   on   February   15,   2007,   Sir   Nicholas   participated   in   a conference   at   Yale,   where   he   confronted   some   of   his   staunchest   critics,   including   William   Nordhaus   and Robert   Mendelsohn.   Not   every   author   of   every   BCA   would   have   been   so   brave   or   open   to   disputation.   (Ibid, 89) And finally: At   the   same   time,   the   Stern   Review   seems   to   have   influenced   how   other   economists,   including   some   of   the Stern   Review's   staunchest   critics,   approach   the   economics   of   climate   change.   After   slamming   the   Review when   it   was   first   published,   Tol   and   Yohe   more   recently   have   suggested   that   Stem   and   his   co-authors   "may be   right"   (albeit   "for   the   wrong   reasons").   Weitzman   always   suspected   that   might   be   the   case."   While   critical of   the   Stern   Review's   choice   of   parameter   values,   Weitzman   thought   Stem   was   right   to   focus   more   attention on   the   potential   for   climate   change   catastrophes.   Since   the   Stern   Review   was   published,   Weitzman   has been   working   to   improve   the   treatment   of   low-probability   catastrophes   in   climate   change   IAMs. [6]    Nordhaus, meanwhile,   has   amended   his   own   DICE   IAM   to   reduce   the   pure   rate   of   time   preference   ( d )   in   half   from   3   to 1.5, although it is not clear whether the Stern Review played any role in this decision…. To   his   credit,   Stem   never   claimed   that   his   conclusions   and   recommendations   were   the   final   word   on   the economics   of   climate   change.   He   claimed   only   to   be   making   "a   contribution   to   the   discussion."   Judged   as such,   the   Stern   Review   may   be   the   most   important   contribution   so   far   to   the   economics   of   climate   change. (Ibid, 90) I   have   not   found   any   more   recent   writer   who   disputes   this.   So   this   outsider   concludes   that,   on   balance,   in   terms   of his   application   of   Ramsey’s   discounting   equation   Lord   Stern   wins   his   case .   It   seems   appropriate   therefore   to reproduce it. In Ackerman’s summary, [D]elays   in   mitigation   will   only   make   costs   rise,   foreclosing   the   opportunity   to   reach   lower   stabilization   targets at   acceptable   costs.   Since   greenhouse   gases   remain   in   the   atmosphere   for   decades   or   centuries   after   they are   emitted,   the   cost   of   reaching   any   particular   stabilization   target   depends   on   how   much   is   already   up   there, as   well   as   how   much   is   emitted   in   the   future.   The   longer   we   wait,   the   higher   the   atmospheric   concentration will   be,   and   the   more   drastic   the   cutbacks   in   emissions   that   will   be   required   to   stabilize   at   reasonable   levels. In   terms   of   the   graph,   the   cost   curve   will   move   steadily   upward   if   we   delay   –   raising   both   the   achievable concentration, and the costs of getting there. (Ackerman 2007, 19)


Reflecting on the above, there seem to be three related issues which need disentangling: (1) The   Chancellor   and   politicians   want   to   know,   how   much,   if   any,   of   GDP   will   it   be   cost   effective   to   commit towards climate change mitigation? (2) The economists  want to know, how best can they design a cost benefit analysis so as to answer (1)? (3) The   world    wants   to   know,   how   do   we   mitigate   (or   even   prevent)   climate   change   as   an   end   in   itself, whatever the cost? There   is   a   suggestion   in   (1)   here   which   concerns   us.   It   is   that   Chancellors   and   politicians   will   only   pay   for   mitigation   if it   is   cost   effective   to   do   so .   A   Chancellor   whose   business   is   to   balance   his   budget   will   naturally   want   to   spend   as   little as   possible,   and   to   make   as   much   profit   as   possible   on   what   he   does   spend.   But   there   is   a   moral   problem   here which   transcends   economics.   We   are   treating   the   earth   as   though   we   owned   it.   But   we   do   not   own   it.   Having received   it   from   our   ancestors,   we   merely   hold   it   in   trust   for   all   of   our   subsequent   descendants.   We   and   our immediate   predecessors   since,   perhaps,   the   industrial   revolution,   have   breached   that   trust.   It   is   therefore   incumbent upon   us,   having   now   realised   the   extent   of   the   damage   and   the   urgency   of   action,   as   a   moral   duty ,   to   do   whatever we can to rectify this, regardless of our own personal discomfort, political or electoral considerations. Issues   of   how   we   assess   the   rights   of   future   generations   in   comparison   with   our   own   which   are   implicit   in   the   choice of η are beside the point. We are already their debtors. Stern’s wrestling with these issues is deeply impressive: [T]he   current   generation   does   not   have   the   right   to   consume   or   damage   the   environment   and   the   planet   in   a way that gives its successor worse life chances than it itself enjoyed. (Stern Review, 2A.1, 42) The   notion   of   ‘stewardship’   can   be   seen   as   a   special   form   of   sustainability.   It   points   to   particular   aspects   of the   world,   which   should   themselves   be   passed   on   in   a   state   at   least   as   good   as   that   inherited   from   the previous generation…. Essentially,   in   this   approach   each   generation   has   the   responsibility   of   stewardship.   Some   would   see   the climate   in   this   way,   since   it   shapes   so   much   of   all   the   natural   environment   and   is   not   straightforwardly substitutable   with   other   capital.   Others   might   ask   still   more   basic   questions   as   to   how   we   ought   to   live, particularly in relation to nature. (Stern Review, 2A.1, 43) Lord   Stern   is   quite   evidently   deeply   concerned   to   do   all   he   can   to   preserve   the   planet   as   in   (3)   above,   and   to   that   end his   Review    stands   as   a   wake   up   call   to   us   all.   He   is   wholly   aware   of   issues   of   moral   responsibility.   But   his   brief   is   to examine   (1),   for   which   he   needs   a   cost   benefit   analysis   whose   bottom   line   is   GDP.   Without   this   the   politicians   of today might take no action at all. But cost benefit is not an issue in relation to (3). There   is    a   role   for   cost   benefit   analysis,   not   to   compute   the   financial    outcome   in   terms   of   GDP,   but   in   terms   of   the effectiveness    of   proposed   scientific   strategies   in   minimising   greenhouse   gases.   This   is   a   measurable   scientific   issue which   does   not   rest   on   endless   disputes   about   unquantifiable   ethical   issues.   It   has   nothing   whatever   to   do   with anyone’s   right    to   consume   or   damage   the   environment.’   We   have   no   human   right    to   damage   anything.   But   we   do have   an   unquantifiable   responsibility   to   generations   yet   unborn   whose   lives   will   already   have   been   blighted   by   our own   polluting   lifestyles.   And   for   forcing   us   to   recognise   this   we   have   every   reason   to   be   grateful   to   Lord   Stern   whose Review  stands as a towering contribution to the battle against climate change.


However,   we   may   question   whether   Ramsey’s   equation   is   itself   fit   for   purpose.   What   concept   for   instance   does   it entertain   of   people?   People   appear   in   it,   indirectly,   as   consumers.   For   Beckerman   and   Hepburn   (2007,   196)   this utilitarianism is too impersonal: Thus the recipients of utility are regarded simply as vessels into which one puts a certain amount of utility. Is   this   adequate?   People   can   think .   They   can   make   choices .   And   they   can   change .   And   this   has   a   very   considerable impact   on   our   problem.   For   the   only   ways   of   mitigating   climate   change   that   this   model   envisages   are   monetary : those    whose    financial    value    forms    a    significant    element    of    GDP.    Annex    A    illustrates    how    a    comparable environmental   problem,   that   of   waste   and   litter,   can   be   substantially   combated   by   thinking   people   at   minimal   public expense . Further,   by   far   the   most   powerful   thing   we   can   do   towards   our   ends   is   to   change    attitudes    –   which   may   cost   little,   if anything   at   all.   We   must   begin   thinking   the   unthinkable .   One   attitude   we   could   profitably   address   immediately   is   the widely   prevalent   view   that   all   new   technology   promotes   human   wellbeing;   that   ‘Because   we   CAN,   we   MUST.’ Sometimes   traditional   technology   is   to   be   preferred.   For   instance   who   benefits   from   petrol-driven   leaf   blowers, whose   manufacture   requires   non-negligible   quantities   of   the   earth’s   resources,   and   whose   operation   generates greenhouse   gases   while   inflicting   noise   pollution   on   the   neighbours?   If   they   are   imported   they   reduce   GDP   as   well. What   do   they   achieve   that   cannot   be   done   by   a   traditional   broom,   which   is   more   likely   to   improve   the   physical wellbeing of the user at the same time? Each   new   device   should   prompt   us   to   ask,   Does   this   enable   us   to   do   something   worthwhile   that   we   could   never   do before ,   as   did   refrigerators   and   televisions?   Does   it   genuinely   save   labour,   like   washing   machines,   or   does   it   simply make   us   lazy   –   as   some   would   say   of   dishwashers?   Does   it   justify   the   expense   of   resources   and   electricity   use which   increases   the   national   requirement   for   power?   Such   devices   also   tend   to   speed   up   the   pace   of   life,   which   also carries implications for our health and overall happiness. There are virtues in simplicity . Similar questions might well be asked of the planned HS2 programme. In   the   same   vein   we   should   beware   also   of   the   notion   that   automation   for   its   own   sake   is   an   unqualified   good .   Each new   application   of   wireless   or   internet   technology   brings   with   it   the   possibility   of   malicious   interference   from   hackers, cybercriminals   and   other   undesirables.   As   we   approach   the   age   of   driverless   cars   we   will   need   to   be   aware   that   any such   vehicle   carries   with   it   the   risk   of   online   hijack   by   superior   technology,   thus   initiating   a   perpetually   escalating digital   war   such   as   that   with   which   banks,   industry,   the   defence   establishments   and   even   private   individuals   are already   familiar.   Another   example   is   the   newly   introduced   ‘contactless’   debit   cards   whose   advantages   are   unclear. Apart   from   the   obvious   point   that   any   such   card   dropped   in   the   high   street   enables   the   finder   to   make   a   series   of fraudulent   purchases   unchallenged,   it   now   transpires   that   there   are   already   devices   available   cheaply   on   the   internet which   enable   the   user   to   scan   such   a   card   from   a   distance   while   it   is   still   within   the   wallet   or   handbag.   This   is   a   high price   to   pay   for   negligible   convenience .   And   while   contactless   cards   obviously   do   not   directly   cause   global   warming, they   nevertheless   form   part   of   the   culture   of   ‘Because   we   CAN,   we   MUST’   which   must   be   eradicated   if   greenhouse gases   are   to   be   minimised.   At   the   very   least   we   shall   need   as   a   matter   of   course   to   provide   lower   technology alternatives   as   fallback   facilities   wherever   possible,   just   as   high   rise   buildings   require   staircases   as   well   as   lifts. ‘Yesterday’s technology has a great deal to be said for it.’ [7] What   is   plain   is   that   the   t ransformation   of   our   thinking ,   values   and   practices   required   to   tackle   climate   change   is   not something   that   can   be   confined   to   a   single   ministry   as   can,   say,   the   Health   Service   or   the   armed   forces.   The necessary   revolution   needs   to   be   universal,   affecting   all   areas   of   national   life,   if   it   is   to   succeed   at   all.   For   this   we   will need   to   rest   upon   a   broadly   acceptable   foundation   –   a   metaphysics   –   of   proven   worth,   such   as   is   proposed   in   Annex B.    Given    leadership,    at    a    time    of    deep    political    divisions    following    the    two    recent    referendums    on    Scottish independence   and   ‘Brexit’,   such   a   transformation   could   prove   a   healing   and   unifying   experience   for   the   UK   as   a whole.   Beyond   that,   at   the   time   of   writing   (immediately   after   the   September   2016   G20   summit),   when   it   is   reported that   our   stock   in   the   world   is   lower   than   for   many   years, [8]    successful   innovations   in   combating   climate   change   could become   a   positive   example   for   the   UK   to   offer   to   the   world.   This   is   after   all   the   very   scope   and   intention   of   the   Stern Review . At the same time it could give us a fresh sense of purpose and national identity. Is it not worth a try? Martin Mosse, September 2016.


LOW COST REPAIR OF THE ENVIRONMENT It    is    characteristic    of    the    Stern    Review     and    similar    analyses    of    cost    effectiveness    that    they    focus    mainly    on approaches   to   climate   change   mitigation   which   involve   substantive   monetary    outlay,   and   that   mainly   dependent   on government   expenditure.   They   tend   to   ignore   low   technology   approaches   which   cost   very   little,   or   very   little   public money,   but   which   are   strong   in   human   imagination   and   creativity,   or   alternatively   require   changes   in   human   thinking, life   patterns   or   behaviour.   But   even   within   living   memory   attitudes   and   behaviour   have   been   significantly   changed   by government-sponsored   advertising   campaigns   which   by   comparison   with   technological   solutions   are   relatively   cheap to   run   and   of   limited   duration.   Such   have   been   the   1960s   campaign   to   make   normal   the   wearing   of   seat   belts   in   cars; the   Road   Safety   Act   of   1967   which   introduced   the   breathalyzer,   recent   legislation   to   prevent   smoking   in   public   places and   so   forth.   Such   campaigns   tend   to   involve   single   non-recurring   expenses,   unlike   for   instance   ongoing   measures to   reduce   greenhouse   gas   emissions   by   changing   energy   sources,   where   the   initial   hardware   expense   may   be followed by indefinite cost increases. The proposed new Hinkley Point C power station provides an example. Let   us   consider   by   example   the   comparable   problem   of   litter   and   waste   disposal.   Imagine   a   council   whose   domain has   a   major   problem   with   litter,   especially   besides   roads   and   in   lay-bys.   A   high-tech   solution   might   be   to   buy   a   new pickup   truck   to   travel   round   and   clean   up   each   lay-by   on   a   rotating   basis.   This   would   mean   employing   a   driver   and other   staff,   as   well   as   regular   maintenance,   and   would   in   addition   have   the   side   effect   of   burning   diesel   fuel,   with consequent emission of greenhouse gases. A   cheaper   way   could   be   to   generate   local   enthusiasm   for   getting   the   litter   picked   up   by   volunteers.   In   March   this   year a   small   army   of   adults   and   children   all   over   the   country   united   in   a   hugely   successful   campaign   to   Clean   For   The Queen [9]    in   order   to   clear   up   the   worst   trouble   spots   all   over   the   country,   unpaid,   in   order   to   celebrate   Her   Majesty’s ninetieth birthday, at minimal public expense. Some villages have a strong ethos of clearing litter either for its own sake or for participation in a ‘Tidiest village’ type of competition.[10] But   best   of   all,   people   can   be   educated   not   to   drop   litter   at   all .   For   a   small   effort   in   schools,   in   the   home   and elsewhere,   an   entire   culture   can   be   turned   around.   Initial   outlay   may   be   minimal   but   the   effect   indefinite.   Germany   is famous   for   its   national   culture   of   tidiness. [11]    In   Switzerland   the   tidiness   and   cleanliness   culture   extends   even   into   the home. [12] As   for   waste   disposal,   perhaps   the   most   striking   voluntary   enterprise   is   the   worldwide   Freecycle   network   whose webpage [13]  reads: Welcome!   The   Freecycle   Network™   is   made   up   of   5,287   groups   with   9,115,487   members   around   the   world. It's   a   grassroots   and   entirely   nonprofit   movement   of   people   who   are   giving   (and   getting)   stuff   for   free   in   their own   towns.   It's   all   about   reuse   and   keeping   good   stuff   out   of   landfills.   Each   local   group   is   moderated   by   local volunteers (them's good people). Membership is free. A   small   government   investment   to   support   or   replicate   such   a   scheme   in   areas   where   it   is   not   currently   represented would be hugely cost effective. Again,   the   Guardian    website   reports   that   in   the   first   six   months   since   the   introduction   of   a   5p   charge   in   2015,   the number   of   single-use   carrier   bags   handed   out   by   retailers   dropped   to   500   million,   compared   with   7   billion   the previous year. [14]  This required no more than an act of Parliament but has a huge effect on the environment. All   this   suggests   that   in   matters   of   the   environment   an   enormous   amount   can   be   achieved   for   minimal   government outlay,   if   any   at   all,   by   the   use   of   the   imagination   in   changing   the   way   people   think ,   and   so   the   way   they   behave .   In time   entire   cultures   can   be   turned   round.   Such   possibilities   cannot   be   captured   by   a   cost   benefit   analysis   such   as   the Review  which considers only the expenditure in terms of GDP as the driver of change.


METAPHYSICAL BASIS FOR CLIMATE CHANGE MITIGATION Stern   is   evidently   extremely   aware   of   the   ethical   dimension   of   climate   change   mitigation   and   deliberates   on   this   at length   at   the   start   of   his   Review.   He   is   rightly   suspicious   of   arguments   about   the   ‘right   to   emit’   at   certain   levels.   There is no ‘human right’ to pollute the planet. He has a strong sense of stewardship, which points   to   particular   aspects   of   the   world,   which   should   themselves   be   passed   on   in   a   state   at   least   as   good as that inherited from the previous generation. ( Review , 2A.1, 43) The   need   to   produce   quantifiable   answers   leads   him   to   adopt   a   Classical    Utilitarian   approach   to   ethics   embodied   in Ramsey’s    equation    as    a    means    of    achieving    intergenerational    justice.    For    this    his    Review     has    been    roundly castigated   by   Beckerman   and   Hepburn   (2007)   on   account   of   its   “impersonal,   or   cosmopolitan,   consequentialism” (p.188),   which   treats   people   of   all   generations   as   of   equal   value.   Against   this   they   prefer   agent-relative   ethics, deriving    from    David    Hume,    which    attach    more    importance    to    people    alive    today    than    to    distant    generations. Rejecting   also   the   ‘revealed   ethics’   of   the   marketplace,   they   dismiss   (Plato’s,   unattributed)   philosopher   kings   with   a single swipe of the name of Isaiah Berlin (205-6). So   how   do   we   begin   in   our   postmodern,   materialist   age   to   judge   between   competing   ethical   schemes?   Is   there anywhere   or   anyone   to   whom   we   can   turn   for   some   kind   of   ethical   guidance?   Are   we   really   doomed   by   the   near- universal   relativism   of   our   age?   For   if   we   are   incapable   of   finding   any   common   basis   for   agreement   on   climate change   with   any   chance   of   international   acceptance,   our   efforts   to   protect   the   planet   are   likely   to   be   in   vain.   As   is   not uncommon   in   cases   of   truly   intractable   issues,   there   may   be   something   to   be   said   for   delving   back   into   the   past   for an understanding of how the present mess came about. It   was   in   response   to   this   very   environmental   crisis   that   the   Islamic   (Sufi)   Professor   Seyyed   Hossein   Nasr,   wrote   his penetrating,   prophetic   book   Man   and   Nature:   The   Spiritual   Crisis   of   Modern   Man.   In   this   he   argues   that   the ecological   and   environmental   problems   of   today   have   a   spiritual   origin,   stemming   ultimately   from   the   rejection   by Western civilisation of its own metaphysical roots at the time of the Renaissance. The   disappearance   of   a   real   cosmology   in   the   West   is   due   in   general   to   the   neglect   of   metaphysics,   and more particularly to a failure to remember the hierarchies of being and of knowledge. (Nasr 1997, 23) The   Middle   Ages   thus   drew   to   a   close   in   a   climate   in   which   the   symbolic   and   contemplative   view   of   nature had been for the most part been replaced by a rationalistic view. (Ibid, 63-64) This has led to a disregard for what we once saw as our nurturing ‘Mother Earth’, of which the ultimate consequence has been the present climate change crisis. One of the chief causes for this lack of acceptance of the spiritual dimension of the ecological crisis is the survival of a scientism which continues to present modern science not as a particular way of knowing nature, but as a complete and totalitarian philosophy which reduces reality to the physical domain and does not wish under any condition to accept the possibility of the existence of non-scientific world views. (Ibid, .4) Modern   man,   faced   with   the   unprecedented   crisis   of   his   own   making   which   now   threatens   the   life   of   the whole   planet,   still   refuses   to   see   where   the   real   causes   of   the   problem   lie.   He   turns   his   gaze   to   the   Book   of Genesis   and   the   rest   of   the   Bible   as   the   source   of   the   crisis   rather   than   looking   upon   the   gradual   de- sacralization   of   the   cosmos   which   took   place   in   the   West   and   especially   the   rationalism   and   humanism   of   the Renaissance   which   made   possible   the   Scientific   Revolution   and   the   creation   of   a   science   whose   function, according   to   Francis   Bacon,   one   of   its   leading   proponents,   was   to   gain   power   over   nature,   dominate   her   and force   her   to   reveal   her   secrets   not   for   the   glory   of   God   but   for   the   sake   of   gaining   worldly   power   and   wealth. (Ibid, 6) Having   devastated   nature   through   the   application   of   a   science   of   a   purely   material   order   combined   with greed,   modern   man   now   wishes   to   put   the   blame   at   the   door   of   the   whole   Western   religious   tradition.   But because   the   reality   of   the   Spirit   is   such   that   it   cannot   be   denied   by   any   form   of   sophism   or   limited   science   of the   material   order,   the   ecological   crisis   cannot   be   solved   without   paying   particular   attention   to   the   spiritual dimension of the problem. (Ibid, 7) We have lost the art of thinking  and urgently need to rediscover it. In this writer’s judgement, we need look no further than Plato, of whom wrote Alfred North Whitehead, The   safest   general   characterisation   of   the   European   philosophical   tradition   is   that   it   consists   of   series   of footnotes to Plato. [15] Plato’s   Replublic    offers   us   as   fine   a   manual   on   learning   to   think    as   has   originated   anywhere   in   Western   culture,   to which   it   provided   a   generous   foundation.   He   offers   us   a   metaphysics   –   a   structure   for   our   thinking   –   which   supplies   a firmer   basis   than   the   almost   universal,   one-dimensional   materialism   of   our   present   destructive   age   of   which   Nasr complains,    and    finds    support    in    the    paradoxical    and    mysterious    nature    of    mathematics,    which    is    commonly overlooked by contemporary scientism. [16] As   to   the   philosopher   kings   for   which   the   Republic    is   famous   –   the   thinkers ,   so   scorned   by   Beckerman   and   Hepburn, whom   Plato   wanted   to   put   in   charge   of   his   ideal   state   –   we   may   yet   see   their   day.   Our   present   heir   to   the   throne   is after   all   no   mean   thinker.   As   such,   His   Royal   Highness   may   be   said   with   few   rivals   such   as   Al   Gore   to   have   done more   to   combat   climate   change   than   any   other   single   individual.   The   Prince’s   Rainforest   Project, [17]    inaugurated   in October   2007,   just   a   year   after   the   first   release   of   the   Stern   Review,   has   won   recognition   within   the   international community   of   scientists   and   others   dedicated   to   taming   the   climate   change   monster   by   a   constructive   proposal   to preserve the rainforest. In the Prince’s own words, If deforestation can be stopped in its tracks, then we will be able to buy ourselves some much-needed time to build   the   low   carbon   economies   on   which   our   futures   depend.   I   have   endeavoured   to   create   a   global   public, private   and   NGO   partnership   to   discover   an   innovative   means   of   halting   tropical   deforestation.   Success would   literally   transform   the   situation   for   our   children   and   grandchildren   and   for   every   species   on   the planet. [18] For   over   forty   years   of   endeavour   to   promote   environmental   awareness   and   sustainability   His   Royal   Highness   was   in October   2012   honoured   with   The   International   Green   Awards’   Lifetime   Achievement   Award.   In   his   acceptance speech, delivered in absentia , he said If   we   are   really   going   to   meet   the   needs   of   9   billion   people   by   2050   and   keep   nature’s   capital   intact   we   have to bring about a substantial transformation in the way we do things. [19] ‘He    that    hath    ears    to    hear,    let    him    hear.’    This    transformation    will    most    certainly    be    required    if    the recommendations   of   the   Stern   Review    are   ever   to   be   implemented   on   an   international   scale.   It   begins   with our thinking .


For clarity a broadly chronological sequence has been followed.


Ramsey, F. P. (1928), "A mathematical theory of saving", Economic Journal Vol. 38, Iss. 152 (December 1928), (543-559). Accessed 23 August 2016..


Stern, Nicholas (2006), Stern Review on the Economics of Climate Change, 30 October 2006 (original edition without postscript).  Accessed 23 August 2016. Postcript January 2007: Accessed 23 August 2016. Combined January 2007:  Accessed 6 September 2016. Stern, Nicholas (2007), The Economics of Climate Change (Cambridge: Cambridge University Press) (includes postscript). Review/dp/0521700809/ref=sr_1_2?s=books&ie=UTF8&qid=1471946689&sr=1- 2&keywords=stern+climate++change Accessed 22 August 2016.

OVERVIEW Accessed 22 August 2016.


Dasgupta, Partha (2007), ‘Commentary: The Stern Review’s Economics of Climate Change’, National Institute Economic Review. London: Sage Publications. 199 January 2007, 4–7. w.pdf Accessed 23 August 2016. Beckerman, Wilfred and Cameron Hepburn (2007), ‘Ethics of the Discount Rate in the Stern Review on the Economics of Climate Change’, World Economics Vol. 8, No. 1, January–March 2007, 187-210.  Accessed 22 August 2016. Nordhaus, William D. (2007), ‘A Review of the Stern Review on the Economics of Climate Change’, Journal of Economic Literature, Vol. XLV (September 2007), 686–702 Accessed 22 August 2016. Weitzman, Martin L. (2007), ‘A Review of the Stern Review on the Economics of Climate Change’, Journal of Economic Literature,  Vol. XLV (September 2007), 703–724. Accessed 22 August 2016


Dietz, Simon, Chris Hope, Nicholas Stern & Dimitri Zenghelis (2007), ‘Reflections on the Stern Review (1) A Robust Case for Strong Action to Reduce the Risks of Climate Change’, World Economics Vol. 8, No. 1, January–March 2007, 121-168.  Accessed 22 August 2016. Ackerman, Frank (2007), ‘Debating Climate Economics: The Stern Review vs. Its Critics’, Report to Friends of the Earth-UK, July 2007. Accessed 22 August 2016. Evans, David (2008), ‘Climate Change - the Stern Review and Discounting the Future’, Royal Economic Society Newsletter 141, April 2008. Accessed 22 August 2016. Dietz, Simon and Nicholas Stern (2008), ‘Why Economic Analysis Supports Strong Action on Climate Change: A Response to the Stern Review's Critics’, Review of Environmental Economics and Policy, 23 April 2008, Volume 2, Issue 1, 94-113. Accessed 22 August 2016. Dietz, Simon (2008), ‘A long-run target for climate policy: the Stern Review and its critics’, part of a consultancy project for the Committee on Climate Change Secretariat to provide analytical support on the long-term review, 2 May 2008. Accessed 23 August 2016. Cole, Daniel (2008), ‘The Stern Review and Its Critics: Implications for the Theory and Practice of Benefit-Cost Analysis’, Natural Resources Journal Vol. 74, Winter 2008, 53-90. Accessed 22 August 2016.


Plato (2003), Republic, tr. H.D.P. Lee, second edition (revised) with Further Reading by Rachana Kamtekar, London: Penguin Classics. Schumacher, E.F. (1974), Small is Beautiful: A Study if Economics as if People Mattered, London: Abacus. Nasr, Sayeed Hossein (1997), Man and Nature: The Spiritual Crisis of Modern Man, Chicago, IL: ABC International Group. HM Treasury (2011) The Green Book: Appraisal and Evaluation in Central Government. pdf Accessed 3 September 2016. Mosse, Martin (2014), ‘The Lion, the Cage and the Peashooter’, BRAINWAVES Report BW/018. [1] Dasgupta 2007, 4. [2] Nordhaus (2007, 289) [3] A “tractable workhorse”, as Beckerman and Hepburn describe it (2007, 191). [4] Compare the Green Book (2011) where in different notation the Social Time Preference Rate r, valid for up to 30 years, is computed using d = 1.5%, h = 1.0, g = 2%, giving r = 1.5% + 1.0*2% = 3.5%. For longer periods the recommended Declining Long Term Discount Rate is specified in a table whose entry for 201-300 years is given as 1.5%, beyond which 1.0% is to be used [5] Stern Review, Appendix to Chapter 2, p.48. [6] IAM: Integrated Assessment Model. [7] Sometimes referred to as Mosse’s Third Law. I have in mind Dr E.F. Schumacher’s brilliant concept of Intermediate Technology brought to public notice in 1973 by his prophetic book Small is Beautiful: A Study of Economics as if People Mattered. It is to be regretted that when he wrote the dangers of fossil fuels had not been fully appreciated, which occasionally colours his argument. [8] ‘Britain’s reputation as a force for stability in the world has been shaken’ (Rachel Sylvester, ‘May hit by whirlwind of political emotion’, The Times, 6 September 2016.) [9] See . Accessed 2 September 2016. [10] As reported sometimes on the Isle of Wight, as 9661.aspx . Accessed 2 September 2016. [11] . Accessed 2 September 2016. [12] . Accessed 2 September 2016. [13] . Accessed 2 September 2016. [14] charged-introduced . Accessed 2 September 2016. [15] A.N. Whitehead, Process and Reality (1929), part 2, chapter 1 [16] This writer’s website is dedicated to the business of rediscovering the lost art of thinking. On the mystery of mathematics see in particular BRAINWAVES Report BW/018, ‘The Lion, the Cage and the Peashooter’, in Section II of the website. For numerous renowned mathematicians such as G.H. Hardy and Sir Roger Penrose, ‘mathematical reality’ exists objectively in its own right outside us, equally real as the physical reality of the everyday world of our senses. If so then there is precedent for the genuine objective existence of abstracts in which Plato believed but which lies outside the credo of modern scientism. [17]  [18]  [19]