The Missing Minority Report: The Stern Review's Lost Opportunity

In early twentieth century Britain, unremitting poverty was feared to be leading towards severe social unrest, societal breakdown and general revolt. As a result, in 1905 His Majesty's government established a Royal Commission on the Poor Law (1905-09) of which noted Fabian Beatrice Webb was appointed member. As an expression of her disagreement with the Royal Commission, Beatrice Webb, along with her husband, wrote and published a minority report, calling for the abolishment of the Poor Laws and the transfer of responsibility to other groups. The Webbs' argument was that the government should work towards preventing poverty rather than focusing solely on relief efforts. This document is often cited as the impetus of the British welfare state.

One hundred years later, the Labour Government commissioned another LSE academic Nicholas Stern to research and write the Stern Review on the Economics of Climate Change which considered arguably the most pressing problem of our generation and our children's generation. The fact that environmental issues have returned to the high table cannot be dismissed. Surely, it is commendable that a state as influential as the United Kingdom has brought environmental issues to the forefront.


That crazy tree hugger, Nicholas Stern

Stern's basic premise is that atmospheric and ecological degradation will cost the world economy dearly: by the year 2050, a total decrease of up to 20 per cent of world GDP, bringing economic mayhem to all.

Stern introduced two important concepts on CO2 emissions: stabilization and reductions. As he wrote:

The risks of the worst impacts of climate change can be substantially reduced if greenhouse gas levels in the atmosphere can be between 450 and 550ppm CO2 equivalent (CO2e). The current level is 430ppm CO2e today, and it is rising at more than 2ppm each year. in this range would require emissions to be at least 25% below current levels by 2050, and perhaps much more.

Ultimately, stabilisation – at whatever level –requires that annual emissions be brought down to more than 80% below current levels.

Stabilized means several things for Stern, depending on whether a short or long term perspective is taken. As Stern argues, in the immediate future, emissions are unlikely to reach a plateau at 430 ppm, so a an initial top rate should be established at 450 to 550 ppm, which can be achieved through spending 1 per cent of GDP. In other words, Stern reckons we can keep spewing out pollution at rates superior to currents emissions to avoid the worst impacts. Yet, in a near contradictory statement, he admits that by 2050 total emissions need to drop by 60-80 percent, which of course begs the question, how much would an 80 per cent drop in CO2 emission cost?

Stern suggests that an annual 1 per cent GNP investment in green technologies will resolve help this issue. He also suggests, strong policy is needed, where carbon is regulated, low carbon technologies are developed, and barriers to energy efficiency are removed.

All of this, of course, makes perfect sense now and even more sense in the context of the United Nations Climate Change Conference starting today in Nairobi. Indeed, with the release of the Stern review, the British have adroitly positioned themselves to set this week's agenda. From the reaction of think tanks and NGOs throughout Britain we can also expect something of a love-in this week: the British branch of the WWF, which mustered itself to say, like Stern, that "paradigm shift" was needed, while the Tyndall Centre outlined the need for a 60 percent reduction by 2050, one of the possibilities that Stern himself suggested. Undoubtedly, it is nice that a key Western government is returning the environmental agenda to the high table and that Whitehall and the NGOs are singing the same tune. To cite the cheerleader of this review --- the 1 percent solution --- one has to wonder if spending such a sum to establish CO2 emissions at higher than today's levels is a solution at all.

Yet, as with the Webb's minority report on the Poor Laws, a dissenting, if not radical, voice needs to be heard about the current environmental conundrum in the halls of government. For the greener-of-mind, the Stern review leaves a bittersweet sensation that more is needed, now. And this frustration that is only likely to grow stronger as governments seek consensus between science and capital, while avoiding true leadership.