Climate change costs are not that critical compared to economic development of poor countries – Prof. Per Krussel

Swedish Radio is one of the more rabid and unthinking supporters of global warming orthodoxy (as are all the main stream media in Sweden). So I was rather surprised to see them giving prominence today to Per Krussel, Professor of Economics at Stockholm University. Normally Swedish Radio is so biased and bigoted on this subject that they would have made no mention of this if Krussel had not been a Swedish Professor. Of course – for balance – they then also interviewed a Professor on Environmental Economy who just happens to be a member of the IPCC and clearly backed the alarmist line — what else? He was less than impressive. For representing the IPCC they might just as well have interviewed someone from Greenpeace!

Krussel skewers the Stern Report on fundamental methodology but this itself is nothing new. The Stern Report from 2006 is another one where the content has been massaged to come to a pre-determined conclusion and is almost embarrassingly bad. In my view any document today which cites the Stern Report as support is itself discredited.

Swedish Radio: (free translation from the Swedish)

Many researchers believe that the threat from climate change is the critical issue of our time. But Per Krusell, professor of economics at Stockholm University, and leading a major international effort to calculate the economic costs of climate change, believes that the threat is not that critical in financial terms

“Climate change is a threat, it’s pretty big, but it’s not that huge when translated  into dollars and cents”  says Per Krusell.

Per Krusell leads an international research project to develop an economic model, which the world’s countries can use to figure out their future costs of climate change. The model should be finished in about a year and will be the world’s most advanced tools in this context, according to Per Krusell. So far, they have concluded that GDP in the worst case will only drop by a few percent in most countries, such as Sweden. This differs from the widely publicized Stern Report in 2006 pointing to significantly higher costs.

……..  above all, Krusell is critical of Stern for putting  together all anticipated costs, without discounting these costs  properly in the way economists usually do for future costs. … 

(The Stern report used a discounting factor of 0.1% – but it is normal to use a discount rate of 1%, which therefore lowers the cost of future generations substantially.) …. Economist Per Krusell agrees that climate change is a big problem, but thinks it’s more important to focus on the economic development of the poor countries rather than combating climate change.

“When we consider the effects of climate change, we expect also that there will be a cost especially in poor countries, but it sums up to no great critical issue for the world. It is more important to get the poor countries to develop. I’m a little worried that “environmental thinking” leads to more important issues being ignored.”

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