New economics

“Part of the problem in trying to critique the conventional economic view is that it is very dominant and few people work outside its current strictures. However, the growing realisation that climate change might threaten this world view has led to some new thinking on economics. Perhaps the best known is Sir Nicolas Stern who was chief economist at the World Bank. The UK government asked him to write a report on the economics of climate change, which he did in 2006. The “Stern Review on the Economics of Climate Change” was published predominately to get the world (and in particular the US) to sign a binding treaty on climate change and has to be seen that context. The review had verbal brickbats thrown at it by all sides of the argument. Whilst it has much that is useful in it, the Stern review does have some shortcomings. He seems to have overlooked resource constraints like peak oil as an issue. His headline recommendation was that we could head off the problem of climate change by spending only 1% of gross domestic product on measures to reduce emissions – a figure that seems absurdly low (if so why aren’t we doing this?). But its overarching conclusion was that ‘green growth’ (i.e. growth that does not damage the environment) was possible, this was reiterated in his book. In 2012 the World Bank has published a report saying the same thing. Criticism of this general view rests on the following points from a paper written by Professor Cleveland of Boston University.”  “No oil in the lamp” Chapter 7 excerpt.

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