Friday, January 25, 2008

Australia’s Productivity Commission staff paper points to weaknesses in the Stern Report

Australia’s Productivity Commission has released a staff paper critical of aspects of the Stern Report. I see that John Quiggan has been quick to put a positive spin on the analysis.

John is correct to point to the positive assessments in the paper. However, I must say that I found it disturbing that Stern combined the IPCC’s most pessimistic assessments with a very low discount rate. This essentially overstates the benefits, understates the costs, of action. This flowed through to the media treatment of the headline numbers.

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