Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

It strikes me as puzzling that you place your weight behind the projection of a long-term positive impact of the economy, compared to your rejection of Stern's projection of long-term negative impact on the economy. Favouring one truth above another is, as you might say, a prime example of the truth versus propaganda problem. Your bet that positive economic impact will renounce us of any possible climatic change is as singularly unconvincing as the stock-broker who is whistling on his way to Wall Street on the morning of October 29, 1929.

Vaclav Klaus: My criticism of Stern Report's conclusions - and I am not alone in it - is based on serious economic arguments, not on aprioristic statements. I will give just one example. When you mention Wall Street in your question, you probably understand the concept of the discount rate. It is one of the crucial variables of any economy and its importance grows the more we go into inter-temporal analysis. Analysing the whole 21st century, as Mr Stern does, suggests that the significance of the proper level of chosen discount rate is fatal. Many economists strongly oppose the very low level of discount rate Mr Stern uses for his modelling simulations.

The low level of discount rate means that the future is as big as the present or that anything existing now will be as big in the year 2100 as now. This is ridiculous. Will the banknote of 1000 nomination (in your South African rands or in US dollars) be as big, as relevant, as important in the year 2100 as it is now? I am sorry to say that Mr Stern assumes exactly that.

Sigh. Didn't have the proper moment to formulate my thoughts into a question.

Not time left now to do an analysis on his very economic reply. Interesting though that the answer is dedicated to explaining why Stern is wrong and not why his belief must be right.

by Nomad (Bjinse) on Fri Jun 22nd, 2007 at 04:56:07 AM EST

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