Review of a review

In my previous post I mentioned the Stern Review as a proponent for the kyoto protocol and an opponent to Bjørn Lomborg. However, this blog is aware of the many reviews of the review. One key factor that others have mentioned is that the review is 'not arbitrary and not balanced', as proposed by Zenghelis in the previous video.

Peter Lilley put forward that in general, the Stern Review accurately outlines the basic economic questions involved in global warming. Also, it makes an important contribution in selecting climate change policies with an eye to balancing economic priorities with environmental dangers. 

However, it is political in nature and has advocacy in purpose. For example, it emphasises studies and findings that are in support of its policy recommendations, while opposing views of the dangers of global warming are ignored. Furthermore, the Stern Review was published without an appraisal of methods and assumptions by independent outside experts.

On top of that, Lilley mentions that the Review proposes assumptions that produce very low discount rates relative to our global-warming analyses. If more conventional discount rates were used, the Review's dramatic results will no longer hold true. Hence, we see that we are back to a problem of using appropriate discount rates, and making hypotheses about the behaviour of human beings (i.e. risk aversion, patience etc.)

I believe that this problem of coming up with a solution for climate change is summed up nicely by the following video presentation by Gwyn Prins, a professor at the London School of Economics. He sums up problems faced by humans into two categories- 'tame' and 'wicked'. Tame problems are defined as problems which are bounded, where the more we learn about it, the more certain we are about its characteristics and potential solutions. Wicked problems on the other hand are open problems (such as climate change). Professor Prins is skeptical of human constructed policies to tackle climate change He believes that people are using a tame problem framework (where the more we learn, the more certain we are) to tackle a wicked problem. This is because 'we now know much more clearly about what we do not know'. The connections between human action and climate change are very complicated and he believes that there is a political hubris about climate change. Put in context, this suggests that people believe they can assign specific discount values in their analyses of climate change and proposals for policy solutions but these are often disputed, just as how Lilley has disputed with the Stern Review.