Sir Alan Peacock - Keeping a cool head about climate change

THE Institute of Economic Affairs has published Climate Change Policy: Challenging the Activists edited by energy economist Colin Robinson.

Authors such as David Henderson, Russell Lewis, Julian Morris are bonny fighters for the truth and I am privileged to join them in exploring why economists, even those who respect scientific evidence for climate change, are sceptical of the zeal for subjecting man to an elaborate system of control.

Lewis reminds us it is only a few years ago that scientists warned of the onset of the "new ice age" to which human action, such as the use of aerosols, was a contributory factor. It was even suggested that the rise in carbon emissions with growing industrialisation would not be sufficiently counteractive.

There is an argument that the evidence and modelling has improved since scientists reached this incorrect conclusion. In addition, climate change scientists say, it is undeniable that the pumping of into the air is positively correlated with the growth of industrialisation.

Robinson and Morris demonstrate that this conclusion, when subject to the simplest statistical test, fails.

In theorising, they point out, climate change modellers need not accept that the future will be like the past.

Modellers say: "Is there not sufficient evidence of global warming in the melting of the polar ice caps?"

Here we come to a second reason for scepticism. If true, this can only be, at most, partial evidence in their favour. More generally, policy should require guidance from modelling on the time scale of global warming and its magnitude.

The EU's leaders – with the exception of Czech president Vaclav Klaus – have accepted the word of the vocal chairman of the International Panel on Climate Change (IPCC), Dr Rajendra Pauchauri.

Profound differences have emerged between Pauchauri and the many scientists invited to give opinions to the IPCC.

Henderson, a leading expert on the economics of climate change, makes the telling point that agencies, such as the World Bank and IMF, serve us ill if they continue to accept this "false consensus" and make recommendations for Draconian taxes and regulations that are unenforceable and incompatible with more pressing policy aims such as reducing world poverty.

That brings us to the third reason for scepticism. Whatever the cause of climate change – man-made or not – there must be considerable uncertainty about the timing and scale of its effect on our welfare. Even if the likely effect were agreed, the sacrifice we make now in order to counteract it must depend on how we evaluate future benefits against costs.

The conventional wisdom is to have governments decide, and the Stern Report – the Bible for enthusiastic believers – offers two reasons why this should be the case: the private sector is not to be trusted to voluntarily invest to reduce emissions sufficiently and private persons cannot be trusted to take into account the welfare of future generations.

In Challenging the Activists, Ian Byatt, a former deputy chief economic adviser to the Treasury, shows how these arbitrary judgements are used to advocate drastic action that circumstances hardly justify.

I argue that the main danger to rational discussion is the entrenched position of extreme environmentalists who are clever political operators.

To compare their activities with religious extremism is modish, but enlightening. Prophecy leading to identification of sin, salvation and heresy can be identified in their pronouncements.

Conventional wisdom offers support to this fanaticism and perhaps this should make Royal Society (RS) members more critical of their top brass.

They recently published Climate Change Controversies : a Simple Guide which is simply a polemic against sceptics.

Freeman Dyson, Princeton professor of physics, and a Fellow of the RS remarked: "The authors (...] appear to have forgotten the ancient motto of the Royal Society: Nullus in Verba, Nobody's Word is Final."

&#149 Sir Alan Peacock is a former chief economic adviser to the Dept. of Trade & Industry.