On morals & tigers.

• Author: Collier, Paul
• Position: Climate change and the economy

Nicholas Stern, The Global Deal: Climate Change and the Creation of a New Era of Progress and Prosperity (New York: PublicAffairs, 2009), 256 pp., $26.95.

Nicholas Stern, The Economics of Climate Change: The Stern Review (New York: Cambridge University Press, 2007), 712 pp., $52.00.

Forests are currently being felled to print a raft of new books on global arming. They all address three big questions: Is it really happening? Does it matter? What can we do about it? I am going to focus on Nicholas Stern's new book, The Global Deal That is because, like my friend Lord Stern, I am an economist. As such, neither of us has any special insights as to whether it is really happening. Perhaps the whole mountain of concern is analogous to the now-forgotten millennium bug which was supposedly going to destroy our computer-based economy. The British government spent billions of pounds trying to fix the problem; the less organized Italian government didn't get round to doing anything. In the event, the date changed from 1999 to 2000 with not a single computer problem anywhere. But we cannot count on global warming to be like the millennium bug; let's hope that it is, but we should plan that this time the weight of scientific opinion is broadly right. Indeed, the less reliable the science, the more we should be worried: global warming could possibly be much worse than the central forecasts.

Economists, however, will soon have a lot to contribute--supposing the world wants to fix this problem--on what we can do about it. That is because economics is predominantly about how incentives can be structured so as to change behavior. Getting the incentives right will be the agenda of the next few years. But the here-and-now issue with which economists need to engage is that question in the middle. Supposing that global warming is happening and will in a century or so create problems, and supposing that there are some pretty costly things we could do now to avert those problems, does it matter? This is fundamentally an ethical question. As Nicholas Stern says, to his considerable credit, although economists get very uncomfortable moving from technicalities to ethics, the critical issues in climate change are dependent upon ethical choices. Ethics cannot be avoided, but the ethical assumptions made in the climate-change debate turn out to be pretty bizarre.

Climate change is, in fact, infested with ethical baggage, much of it unhelpful. Let's get rid of some of it now. First, climate change has been hijacked by the environmentalist hatred of industrialized modernity. The scientific process behind global warming--the buildup of carbon emissions--unfortunately might have been designed as a parody of medieval Christian theology. Instead of the wages of sin being death, the wages of industrialization is global warming. Rather than burning in hell, we will burn on earth. The "cap and trade" system, under which the right to emit carbon beyond a set limit can be purchased from the authorities, echoes with remarkable precision the "indulgences" sold by the medieval papacy. The popes needed to finance the building of the Vatican; President Obama needs to finance the fiscal deficit. The environmentalist hatred of industrialization is matched by the guilt-ridden colonialist hangover: we in the rich West are responsible for the poverty of the South. As colonialism receded...