A Note on the Ethical Implications of the Stern Review

Kenny, Charles (2007): A Note on the Ethical Implications of the Stern Review.

Abstract

The Stern Review adopts two interesting elements in its calculation of the costs and benefits of climate change mitigation. First is a ‘global welfarist’ approach that values the utility of the World’s people (now and into the future) equally, and sets global utility maximization as the correct goal for policy. Second is an assumption of a declining marginal utility to income. Consistent application of the ‘global welfarist’ approach and the declining marginal utility of income together would demand an urgent process of global income redistribution. Over the long term, this might see the richest ten percent of the World’s population facing an average redistributive tax rate in the region of 82 percent.

• Item Type: MPRA Paper
• Language: English
• Keywords: Stern Review; Climate Change; Welfare Economics
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General; F - International Economics > F2 - International Factor Movements and International Business > F20 - General

References

Stern, N. (2006) The Stern Review Report on the Economics of Climate Change London: UK Treasury. Milanovic, B. (2002) True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone The Economic Journal 112 (476) Dikhanov, Y. (2005) Trends in Global Income Distribution, 1970-200, and Scenarios for 2015 Human Development Report Office Occasional Paper.