This blog was originally posted on the website Valuing Nature.

The Stern Review on the Economics of Climate Change concluded that the costs of inaction on climate change could rise to 20 per cent of GDP, or more, each year. By contrast, “the costs of action… can be limited to around 1 per cent of global GDP each year”.

There was a widespread expectation that the Stern Review would engender political change. Why, when the economic case is made, should there be such continued resistance to adopting radical policy changes?

Perhaps we shouldn’t be surprised at the lack of impact that Stern had. We have been here before. Back in 1992, in a study that Stern ignores, a global cost benefit analysis demonstrated that even assuming a small probability of catastrophe, ‘aggressive’ action to mitigate climate change was nonetheless economically prudent.

The problem, according to the economist Clive Spash, is inherent to cost-benefit analysis. In his recent paper 'Climate Change: Need for New Economic Thought', he catalogues the reasons that, particularly in the light of the uncertainties surrounding climate change, any cost-benefit analysis must, inescapably, rely upon a series of ethical and social values. “Economists,” he writes, “have attempted to cloak themselves in a veil of innocence by claiming to merely be efficiency analysts who make no value judgements or moral choices but merely report societal preferences reflected in the market place...”

What Spash is arguing is that cost-benefit analyses, although superficially seeming to be objective, are in fact inescapably dependent upon the values which inform them. So if economic analysis seems to conflict with today's dominant political demands, this is easily dismissed as reflecting a set of values that are themselves to be rejected. If one doesn't like Stern's conclusions, one can dismiss them on the grounds that they are value-laden. But nothing in Stern helps to interrogate the values that leads to its dismissal in this way.

We need the rigorous application of science (to tell us what is happening to the climate), and we need the rigorous application of economic tools (to help us create behavioural changes). But what happens in between? How do we use our scientific understanding of what we are doing to the world to inform our economic interventions? This has to be a process informed by societal values. We cannot hope to substitute economic arguments, with the superficial appearance of objective rigour, in place of a debate about the values that underpin the relationship we aspire to create with other people, other living things, and the planet. To attempt this is surely invidious, focussing arguments on the figures (which are known to fall far short of revealing some irrefutable truth about the world), whilst suppressing debate about the values that should underpin the responses we make.