Climate Change Body Faces Criticism for Bad Economics, Bad Science*

The Intergovernmental Panel on Climate Change, which advises governments on the causes and consequences of climate change, was accused by Lord Lawson this week of operating “an environmentalist closed shop that is unsullied by any acquaintance with economics, statistics or, indeed, economic history.”* This view is upheld by a new report from International Policy Network, which assesses the way in which the IPCC predicts future climate change.** Lord Lawson, a former British Chancellor, has described the situation as “potentially a major scandal”.

According to the IPN report, the IPCC, which meets next week in Geneva (28-30 May 2004), appears to have intentionally exaggerated its estimates of temperature increases by using highly implausible scenarios of future growth in emissions of ‘greenhouse gases’. The IPCC uses sloppy assumptions for its estimates of economic growth and the technologies that are likely to be available in years to come. Worse, the IPCC’s reports are used as justification for taking actions – such as the Kyoto Protocol – that will have little or no effect on our climate, but will deeply affect our economic, social and environmental development.

In spite of a stream of criticisms from some of the world’s most highly regarded economists, the IPCC continues to utilise the same flawed methodology. It is now time for the governments that fund the IPCC to call it to account.

The evidence suggests that it will be difficult to reform the IPCC. Short of scrapping the organisation, then, the best governments can do is to require their economic ministries evaluate its work and to require the IPCC to rely more heavily on the work of economic historians and economists who understand how to use statistics.

*Question Time in the House of Lords, Wednesday, 21 April 2004. http://www.publications.parliament.uk/pa/ld199900/ldhansrd/pdvn/lds04/text/40421-02.htm

**“Climate Change Predictions: Bad Science, Bad Economics” By Martin Ågerup, published by International Policy Network, April 2004, available at http://www.policynetwork.net/pdfs/martin-agerup-scenarios-april2004.pdf