In this DeSmog UK epic history post, we recall the climate denial backlash to the influential Stern Review, which called climate change the greatest market failure everĀ seen.
Tony Blair heeded anĀ appeal made by Lord Lawson and the climate sceptic economist David Henderson that the Treasury in Britain and finance ministries around the world should take an active interest in the economic implications of the UN Intergovernmental Panel on Climate Change (IPCC)Ā findings.
And so Gordon Brown, as chancellor, commissioned Nicholas Stern, then a permanent secretary at the Treasury and head of the Government Economic Service, to conduct an exhaustive study into the economics of climateĀ change.
Stern was considered sound: he was educated at Cambridge and Oxford before being made professor at the London School of Economics. He had gone on to serve as senior vice president of the World Bank. Lord Giddens, the eminent academic, described him as āa scholar of impeccable reputation and certainly noĀ scare-monger.ā
RagingĀ Sceptics
The āStern Review on the Economics of Climate Changeā was produced at the Treasury and published in October 2006 ā but the sceptics would be incandescent at itsĀ findings.
Prime Minister Tony Blair was first to speak to the assembled media. āWhat is not in doubt is that the scientific evidence of global warming caused by greenhouse gas emissions is now overwhelming,ā he warned. āIf the science is right, the consequences for our planet are literallyĀ disastrous.ā
Brown spoke for a further 16 minutes to get his sound bite across: āEnvironmental policy is economic policy,ā the chancellorĀ bellowed.
The Daily Mail responded with the headline: āBlair: World Needs to Act on Climate Change Nowā. But the newspaper also chose to mock the Labour leader: āBut never fear ā Superman is here in the shape of our posturing prime minister⦠anyone listening to him yesterday would think he could save the worldĀ single-handedly.ā
Free MarketĀ Challenge
The Stern report itself was stark in its findings and presented a serious challenge to the free market orthodoxy: āClimate change presents a unique challenge for economics: it is the greatest and widest-ranging market failure everĀ seen.ā
The report warned that investment in mitigating climate change today would be unlikely to have any material difference in the next half a century, but that the decisions during the course of the coming decade ācan have a profound effect on the climate in the second half of this century and the next⦠policy must promote sound market signals, overcome market failures and have equity and risk mitigation at itsĀ coreā.
Stern added: āThe evidence shows that ignoring climate change will eventually damage economic growth. Our actions over the coming few decades could create risks of major disruption to economic and social activity, later this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20thĀ century.ā
The simplified message was that Ā£1 invested in mitigation today would save Ā£5 of necessary spending in years to come. Sternās economic solutions sat comfortably within the eminent neoliberal economist Friedrich von Hayekās vision of a freeĀ market.
Curiously, the strategy proposed by Stern ā involving taking steps now that would only come to fruition one or two generations down the line ā is precisely that imagined by Hayek decades earlier in his proposed war of ideas for the free market and against government intention that would prove soĀ successful.
Adapt to theĀ Storm
But those claiming to carry Hayekās flame were simply incensed by the report. Kendra Okonski, environment programme director of the oil-funded free market think tank, the International Policy Networkās (IPN), attacked Stern and asserted that āit is clear that attempting to control climate change through global regulation of emissions or by government fiat more generally would be harmful andĀ counterproductive.ā
Rather than demanding that oil companies, including her sponsor ExxonMobil, limit the production of fossil fuels, the world should simply adapt to the coming storm, sheĀ argued.
āAdaptation should be understood as containing all possibilities in the realm of private, voluntary action ā and eliminating government-imposed hindrances and obstacles to suchĀ action.ā
The IPN had helped to establish the Civil Society Coalition on Climate Change alongside the Hayekian oil-funded Fraser Institute in Canada; Okonski also heavily promoted the think tankās latest climate study.Ā Ā Ā
DenierĀ Meetings
The publication of the Stern Review also spurred Henderson to redouble his efforts. He recalls: āWhen the review itself appeared, we returned to the fray. I was able to reconvene our economic group, again including Ian [Castles, the climate sceptic Australian finance secretary], and I also put together⦠a separate team of scientists and engineers: it comprised Robert Carter, Chris de Freitas, Indur Goklany, David Holland and Richard Lindzen. As a result, two linked review articles, one scientific and the other economic, wereĀ published.ā
Henderson does not mention their names here, but he also recruited Lawson and British-Russian economist Robert Skidelsky from the House of Lordsā economic affairs committee and, significantly, Ross McKitrick from the FraserĀ Institute.
Julian Morris, director of the IPN, confirmed to me that he also attended early meetings with Henderson at Westminster. These shock groups would form a small vanguard of trusted climate sceptics, many of whom would, just three years later, join the ranks of Lord Lawsonās Global Warming Policy Foundation, author its reports, and champion its attacks from closeĀ range.
ScepticalĀ Speech
Lawson led from the front and approached his old friends from the Centre for Policy Studies (CPS), proposing that he speak that November at an event organised to undermine SternāsĀ findings.
āIt was a major sceptical speech,ā Tom Knox from the CPS said, āwhich started off our sort of interest in climateĀ scepticism.ā
Lawson told his audience that āthe relatively new and highly complex science of climatology is an uncertain one, and neither scientists nor politicians serve either the truth or the people by pretending to know more than theyĀ doā.
He then attacked the Royal Society for daring to challenge ExxonMobil: āIt is simply not true to say that the science is settled, and the recent attempt by the Royal Society, of all bodies, to prevent the funding of climate scientists who do not share its alarmist view on the matter is trulyĀ shocking.ā
The speech was gleefully taken up by Fred Singer, head of the notoriously sceptic Science and Environmental Policy Project, who promoted it among his supporters in the UnitedĀ States.
Up next in the DeSmog UK epic history series, we reveal the identity of the man behind Lord Moncktonās eccentric climateĀ denial.
Photo: CIAT viaĀ Flickr
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