Calm down, dear. There’s plenty of time

The Stern Review is four years old but remains a vital tool for Copenhagen’s policy-makers. It shows them exactly what not to do, says Robert O. Mendelsohn

Across the West, we hear the increasingly shrill prophesies that climate change will destroy the earth. The solution proposed is to adopt a new world order with regulations that will dramatically change the global economy. Against this backdrop, world leaders will meet in Copenhagen in a few days’ time to discuss whether such upheaval can be justified. And it is a subject on which economists have plenty to say.

Simply put, the costs of ‘abatement’ — the carbon reduction plans being advocated in Britain and many other countries — must be weighed up against the benefits. For example, one cost is that of more expensive, ‘greener’ energy forms — and the cost of economic potential forfeited by not having as many choices of energy in the future.