Publication of the Stern Review on the Economics of Climate Change appears to have had a significant impact on the climate policy debate. Yet there has been significant criticism of some of the report’s assumptions and conclusions (as I noted here).
Among the more recent critiques is this assessment by Yale’s William Nordhaus (link via Prometheus). Nordaus notes that the Stern Review reached significantly different conclusions from most prior economic assessments, particularly with regard to the optimal rate and timing of emission reductions. Nordhaus concludes in his “summary verdict” of the Review:
The radical revision of the economics of climate change
proposed by the Review does not arise from any new economics, science, or
modeling. Rather, it depends decisively on the assumption of a near-zero
social discount rate. The Review’s unambiguous conclusions about the need for
extreme immediate action will not survive the substitution of discounting
assumptions that are consistent with today’s market place. So the central
questions about global-warming policy – how much, how fast, and how costly
– remain open. The Review informs but does not answer these fundamental
questions.
For a more sympathetic assessment of the Stern Review, see this CT post.
UPDATE: See also Richard Tol’s comments on Nordhaus and Stern here.