Fundamentals of the climate science dispute and common misunderstandings of some issues raised about Part 1 of the Dual Critique of the Stern Review [Vol. 7, No. 4] are discussed. One consideration is that a distinct anthropogenic greenhouse gas signal has not yet been identified within natural climate variations. The slight warming that has occurred in the late 20th century, falling within previous natural rates and magnitudes of warming and cooling, is a priori unalarming. Empirical evidence shows that the warming effect of increasing carbon dioxide at the rates of modern industrial emission and accumulation is minor, noting the established logarithmic relationship between gas concentration increases and warming. No global increase in temperature has occurred since 1998 despite a 15 ppm (4%) increase in carbon dioxide concentration, and an expectation of continued warming even at constant CO2 levels. The key issue is assessment of risk, but that includes the risk of future coolings as well as warmings, as well as their significance relative to other factors. This is why an adaptive policy towards climate change is the most sensible response option.

The Stern Review, described as the most comprehensive review ever carried out on the economics of climate change, was published on 30 October 2006. The twin papers from a combined team of scientists and economists present a critique in two parts of the Stern Review. Part I focuses on scientific issues and their treatment in the Review. It forms the point of departure for Part II which deals with economic aspects. Each paper has its own list of authors. In relation to both scientific and economic issues, the authors question the accuracy and completeness of the Stern Review’s analysis and the objectivity of its treatment. They conclude that the Review fails to present an accurate picture of scientific understanding of climate change issues, and will reinforce ill-informed alarm about climate change. Two interrelated features of the Stern Review are that it greatly understates the extent of uncertainty as to possible developments, in highly complex systems that are not well understood, over a period of two centuries or more; and its treatment of sources and evidence is persistently selective and biased. These twin features have combined to make the Review a vehicle for speculative alarmism. In the judgement of the authors of the Dual Critique, the Stern Review mishandles data; gives too little attention to actual observation and evidence, as distinct from the results of model-based exercises; and takes no account of the failures of due disclosure, and the chronic limitations of peer reviewing, that have been characteristic of work relating to climate change which governments have commissioned and drawn on. As to specifically economic aspects, the authors note among other weaknesses that the Review systematically overstates projected costs of climate change, partly though by no means wholly as a result of its failure to acknowledge the scope for long-term adaptation to possible global warming; underestimates the likely cost—including to the world’s poor—of the drastic global mitigation programme that it calls for; and proposes worldwide adoption of a specially low rate of interest for discounting the costs and benefits of mitigation, on the basis of inadequate analysis and without regard for the problems and risks that would result. So far from being an authoritative guide to the economics of climate change, the Stern Review is deeply flawed. It does not provide a basis for informed and responsible policies.