In 2006, Professor Nicholas Stern produced a report on climate at the request of the British Government. It claimed that climate-related damage would dramatically increase in coming years and was hugely influential at the time. Two years later, Parliament passed the Climate Change Act, the seminal legislation that put Britain on its disastrous path to Net Zero. Seventeen years later, the U.S. economist Professor Roger Pielke observes that Stern’s predictions of climate and weather impacts were only true in one year – 2017 – and in dollar terms the cumulative overestimation in financial damage to date is about $1 trillion.
At the time, the economist Ruth Lea has probably never written a truer word. She told readers of the Daily Telegraph that “I have little doubt that the Government will use the Stern report as a political prop, under the guise of the moral case for saving the planet, for unilaterally raising energy costs”. In the years that followed, successive British Governments did just that, reducing a commitment to cheap local fossil fuel, and promoting unreliable green energy with massive subsidies paid by British consumers.
The Stern Review on the Economics of Climate Change was a major exercise in green scare propaganda highlighting an improbable increase in global temperatures of up to 5°C. Noted Lea: “In Stern’s worst case scenario, global GDP by the end of the century would be 20% lower than would be the case if climate change had been tackled.” She quoted Stern, who said “our actions could create risks of major disruptions to economic and social activity on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century”.
Professor Pielke noted that Stern reported correctly that weather and climate disasters over the decades leading to 2005 totalled around 0.2% of global GDP. Stern made two assumptions of future increases. A lower bound of constant 2% increases in the costs of extreme weather over and above changes in wealth and inflation, and an upper bound assuming a rate of increase of 1% each decade reaching 6% in 2045. Stern said that these values are “likely underestimates”, but the following graph shows that they were not.
In the lower bound example, the grey bars show the expected loss increase from 0.2% of GDP to about 0.35%. The actual losses are shown in black and the dashed linear trend line has hardly moved. Only the one year in 2017 was higher than Stern’s forecast, and Pielke computes the cumulative financial error over the 17 years at no less than $1 trillion. He notes that Stern’s failed prediction “is good news for the world”.