15 May 2008
The attached text formed the basis
for my opening contribution, as also some later remarks, at the
discussion that followed the 2008 Clare Distinguished Lecture in
Economics and Public Policy, given in Cambridge, England on 14 May
2008. The lecturer was Professor Mohan Munasinghe, and his subject was
‘A policy framework for Climate Change and Sustainable Development:
economic analysis and beyond’.
Economic Progress and Climate
Change Issues: A Dissenting Viewpoint
David Henderson 1
I am pleased and honoured to be opening the discussion at this 2008
Clare Distinguished Lecture, and I would like to thank the Master and
Fellows of Clare for inviting me to do so.
In his talk, Professor Munasinghe has put before us a rich and varied
menu. Drawing on his extensive published work, as also on his
experience as a high-level participant on the international scene, he
has provided a wide-ranging review of leading world issues together
with a comprehensive suggested framework for policy. His has been
a notable presentation.
However, I have to say that both his view of the world and his proposed
orientation of policy are not mine: he and I are a long way apart. When
the Master wrote inviting me to speak today, I was careful to check
before accepting. I wanted to be sure that he and the Fellows would be
happy for the opening remarks in today’s discussion to come from a
dissenter. Today’s lecture has not served to undermine or qualify my
In my remarks, I will focus on broad areas of disagreement, rather than
on specific points and arguments – of which there could be many -
arising from Professor Munasinghe’s lecture.
I have two main areas or headings of dissent. One goes a long way back,
while the other has emerged more recently.
Under the first heading, rival views of history are in question.
Looking back over the past six decades or so, on the basis of direct
personal experience, what especially impresses me is the remarkable
extent and spread of material progress. Over these years, output per
person in the world generally, and in most though by no means all of
the economies within it, has grown at rates that were substantially
higher than in the past and much higher than anyone foresaw.
All the countries that counted as developed in 1950 have shared in this
greatly increased prosperity. But the record of economic progress goes
beyond these already advanced economies, in ways that no one predicted
or even imagined, and which mark a decisive break with the past. In the
course of these recent decades, an increasing number of previously poor
countries achieved sustained rates of growth in GDP per head which were
either rare or wholly unprecedented anywhere in earlier history.
In both groups of countries, developing as well as developed, the
advances in real income have gone together with notable improvements in
life expectation, in health, in educational standards, in leisure, and,
in some important respects, in the quality of the environment.
Generally speaking, the extraordinary progress that has been made in
many countries that were previously poor has owed little to outside
assistance. It was not the outcome of official aid programmes, of
public-spirited conduct by large multinational enterprises, or of
charitable actions on the part of ‘the international community’. It was
not made possible by ‘empowerment’. These developments have further
confirmed, what earlier economic history already indicated clearly,
that the material progress of people, rich and poor alike, depends
primarily on the dynamism of the economies in which they live and work.
That dynamism chiefly comes from innovative activity on the part of
people and enterprises. In that connection, both the manifest failure
of collectivist regimes and the experience of progress elsewhere bear
witness to the positive and creative role of economic freedom.
Given reasonable political stability and scope for markets to function
effectively, material progress is likely to go ahead at rates which at
the time when I graduated in Oxford would have been viewed as
So much for my vision. A rival version of history is to be found in a
long and still continuing series of documents and reports, official and
unofficial, in which the record of progress is disregarded or played
down. Instead, these various publications, which have won widespread
acceptance by governments and public opinion, have characteristically
presented a dark and disturbing picture. They give expression to the
set of beliefs which I have termed global salvationism.
In the salvationist view of the world, two elements are combined. First
is an unrelentingly sombre picture of recent trends, the present state
of the world (or ‘the planet’), and prospects for the future unless
governments involve themselves more closely, and with immediate effect,
in the management and control of events. Developing countries, whose
relative poverty is often greatly overstated (as in Professor
Munasinghe’s lecture ), are portrayed as victims of an unjust
international system, so that their progress largely depends on
assistance and empowerment from without. Environmental issues are
treated almost exclusively in terms of problems, dangers, and potential
or even imminent disasters, with the presumed harmful effects of
economic growth as one reason for concern. The second element is
a belief that known effective remedies exist for the various ills and
threats that beset the world: ‘solutions’ are at hand, given wise
collective resolves and prompt action by governments and ‘the
international community’. Global salvationism thus combines dark
visions and alarming diagnoses with confidently radical collectivist
prescriptions for immediate adoption by the world as a whole.
Prominent among the many official salvationist reports down the years
was a 600-page action programme called Agenda 21, which was presented
to, and (with some amendments) adopted by, the huge United Nations
Conference on Environment and Development which was held in 1992 in Rio
de Janeiro. In a book which they brought out in 2005, Professor
Munasinghe and his co-author Rob Swart said of this document that it
‘laid out a blueprint for a just and sustainable world in an
integrated, holistic manner’. However, had I been a British
official at the time of the Rio Summit, I would have argued strongly,
though doubtless to no effect, that John Major and Michael Howard, the
ministers chiefly concerned, should not sign up to it. In presenting my
argument to ministers, I would have begun by taking issue with the
opening sentences of the preamble to the document, which read as
‘Humanity stands at a defining
moment in history. We are confronted with a perpetuation of disparities
within and between nations, a worsening of poverty, hunger, ill health
and illiteracy, and the continued deterioration of the ecosystems on
which we depend for our well-being’.
I would have said of this passage and of Agenda 21 as a whole,
repeating what I had written in 1980 of its lineal predecessor the
Brandt Report, that ‘the view of the world on which it rests is false’.
Now if Professor Munasinghe were commenting on my view of history, he
could say with justice that I had not faced up to the issue of
sustainability. To this I would respond that how far material progress
proves sustainable will chiefly depend on the capacity of people and
institutions to adapt and innovate, while this capacity in turn will
chiefly depend on the prevailing extent of economic and political
freedom. However, such a response would not of course close the
argument; and in any case, Professor Munasinghe could go on to make the
point, again with justice, that I had failed to take account of the
problem of climate change. Let me then turn to this latter topic, which
in fact constitutes my second heading of dissent.
Climate change issues: received opinion
and its basis
Professor Munasinghe has been involved with climate change issues for a
long time, most notably in his capacity as a Vice-Chair of the managing
Bureau of the Intergovernmental Panel on Climate Change, the IPCC. By
contrast, I am a relative newcomer to the subject; my involvement in it
came about more by accident than design; and the opinions that I have
come to hold are far from being widely shared.
Before I summarise those opinions, a word of background is in
In relation to climate change issues, there exists what I call an
official policy consensus. With few exceptions, governments across the
world are committed to the view that anthropogenic global warming
constitutes a serious problem which requires official action at both
national and international level. The decisive collective commitment
was made in 1992, through the UN Framework Convention on Climate Change
which almost all countries have ratified.
In pretty well every democratic country, this policy consensus is not
at all a matter of political controversy: to the contrary, it enjoys
general cross-party support. Further, it has met with widespread public
approval; and in that context, I note that there is considerable
support for it among economists, as evidenced for example in the Stern
Review of the economics of climate change and the list of those
commending or endorsing the Review.
In relation to climate change issues, therefore, one may speak of a
widely shared diagnosis and prescription, a body of well established
received opinion shared by the great majority of governments and by
many of their citizens.
The main basis of this received opinion, I think, is a belief that
scientific research has provided increasingly firm and now
incontestable evidence of the reality and the potential threat of
anthropogenic global warming. The policy consensus is seen as being
firmly grounded on objective expert findings that can no longer be
seriously doubted. In that context, an important role has been played
by the IPCC. In signing up to the Framework Convention in 1992,
governments were influenced by the IPCC’s First Assessment Report which
came out in 1990. Since then the Panel has produced three further
massive reports of a similar kind. The latest of these, known as AR4
for short, appeared last year, and some 2,500 experts – authors,
contributors and reviewers – were directly involved in preparing it. I
refer to this small army of participants as the IPCC expert network.
These later Assessment Reports have served to confirm and reinforce the
commitment that governments made 16 years ago. What is more, the IPCC
and its work have received unsolicited high-level commendation from
leading outside scientists and scientific bodies. I think one may speak
in this context of a prevailing body of scientific opinion as well as a
Grounds of dissent
Against that background, let me now reveal my character as a dissenter.
My dissenting views, though firmly held, do not extend to all aspects
of the consensus and the arguments that surround it.
In the first place, I am not arguing that all actions designed to limit
or reduce ‘greenhouse gas’ emissions are necessarily pointless or
misguided. Given past history and the present situation, I am in favour
of a carbon tax, provided that it can be made to work and is kept
revenue-neutral. Again, I do not take the position that prevailing
scientific opinion is wrong: there is a clear and well recognized
difference between questioning and denial, between being an agnostic
and being an atheist.
All the same, I have come to the view that today’s received opinion on
climate change issues is not well founded. I believe that it
incorporates three mutually reinforcing and unwarranted presumptions.
(1) That the official policy consensus, as widely interpreted today by
governments and international agencies, mirrors prevailing scientific
opinion and goes no further than it would warrant.
(2) That prevailing scientific opinion must now be viewed as no longer
open to serious question.
(3) That the process of review and inquiry from which prevailing
scientific opinion has emerged, and in particular the IPCC process as
its leading element, are professionally above reproach.
All these beliefs are unfounded. They show a lack of awareness
respectively of the present extent of overstatement, overconfidence,
and ingrained bias.
Received opinion: going too far
overstatement. Here are three recent and representative high-level
- Tony Blair, as British Prime Minister, together with his Dutch
counterpart, in a joint letter of October 2006 to other EU leaders: ‘We
have a window of only 10–15 years to take the steps we need to avoid
crossing a catastrophic tipping point’
- Nicholas (now Lord) Stern, writing in The Guardian (30 November
2007): ‘We risk damage on a scale larger than the two world wars of the
- 150 business leaders, in a double full-page advertisement in the
Financial Times last November : ‘There is no doubt that the fate of our
civilisation hangs in the balance’.
Such assertions, and countless others of their kind, purport to be
statements of fact; but in reality they are little more than
conjecture. The unqualified alarm-prone positions that are widely taken
today by political leaders, top international civil servants, eminent
scientists in fields other than climate science, leading
industrialists, influential commentators and media outlets, and an
array of NGOs, not to mention some prominent economists, do not mirror
the more measured language of AR4: they go well beyond it.
overconfidence. The G8 Summit Declaration of last year, in a section on
climate change issues, refers to ‘the scientific knowledge as
represented in the recent IPCC reports…’ Had I been a pre-Summit
Sherpa, involved in the drafting of the Declaration and free to speak
my mind, I would have argued for changing ‘scientific knowledge’ to
‘the weight of scientific opinion’. What is in question here, as I
think is generally recognised, is a climate system of extraordinary
complexity which is far from being well understood. Received
opinions to the effect that ‘the science’ is ‘settled’ or
‘established’, and that the scientific evidence is now ‘overwhelming’,
Such overconfident assertions are not drawn direct from AR4, which
emphasises that its projections are ‘based on expert judgement’, rather
than embodying what is now unassailable truth. However, these
assertions could not have gained such widespread acceptance were it not
for the continuing flaws that have characterised the large-scale
established official process of review and inquiry which, though it
extends well beyond the work of the IPCC, finds its fullest expression
in the Assessment Reports.
This brings me to the third respect in
which received opinion appears as over-presumptive.
Received opinion: uncritically accepting a flawed advisory process
Over the past 20 years governments everywhere, and many outside
observers too, have placed uncritical reliance on the advisory process
as a whole and the work of the IPCC in particular. I believe that this
widespread trust is unwarranted, and that this fact puts in doubt the
accepted basis of official climate policies. The point here is not, as
suggested by Stern Review authors, one merely of ‘procedures’ as
distinct from ‘substance’. If and in
so far as the advisory process that the world relies on is lacking in
objectivity, and is not professionally up to the mark, the basis and
rationale of the official policy consensus are put in question.
Why do governments, and outsiders too, place so much trust in the IPCC?
I think that the trust largely results from the wide and structured
expert participation that the IPCC process ensures. People visualise an
array of technically competent persons whose knowledge and wisdom are
effectively brought to bear through an independent, objective and
thoroughly professional scientific inquiry. Indeed, many people
identify the Panel with the expert network, as though numerous
well-qualified and disinterested scientists were the only persons
involved. The reality is both more complex and less reassuring.
A basic distinction has to be made between the IPCC as such, that is to
say the Panel, and the IPCC process. The two are not the same,
and the process involves three quite distinct groups of participants.
The first of these groups comprises the Panel itself, together with its
Secretariat and its managing Bureau of which Professor Munasinghe is a
leading member. The Panel controls the preparation of the Assessment
Reports. It comprises those officials whom governments choose to send
to Panel meetings.
A second group is made up of the expert
network, the persons who put together the draft Assessment
Reports. The network is separate and distinct from the Panel itself.
There is little or no overlap between the two bodies.
Last but far from least, there are the government departments and the
agencies which the Panel reports to: it is here, and not in the Panel
itself, that the ‘policymakers’ are chiefly to be found. The relevant
political leaders and senior officials within these departments and
agencies form the core of what I call the environmental policy milieu.
Now the IPCC as such has been formally instructed by its member
governments, in the ‘principles governing IPCC work,’ that its reports
‘should be neutral with respect to policy’. However, the instruction
can only refer to the contribution made by the expert network through
the reporting process. It does not, and could not, apply to the other
two participating groups. The official Panel members, as also the
policy milieu which they report to, are almost without exception far
from neutral: they are committed, inevitably and rightly, to the
objective of curbing emissions, as a means to combating climate change,
which their governments have agreed on. The clients and patrons of the
expert network, with few exceptions, take it as given that
anthropogenic global warming is a serious problem which demands, and
has rightly been made the subject of, both national and international
Now it could still be the case that within the network itself, and in
the reporting process, the principle of policy neutrality was
faithfully observed. Indeed, it seems to be widely believed, or
presumed, that an invisible Chinese wall separates the committed
patrons and clients of the reporting process from the array of
disinterested scientists, policy-neutral in their expert capacity, who
take part in it.
I have come to believe that this picture is not accurate, and that the
expert reporting process is flawed. Despite the numbers of persons
involved, and the lengthy formal review procedures, the preparation of
the IPCC Assessment Reports is far from being a model of rigour,
inclusiveness and impartiality.
Critics of the IPCC process have drawn attention, in my opinion with
good reason, to flaws which include:
- Weaknesses in the treatment of some economic issues. 4
- Over-reliance on peer review procedures which do not serve as a
guarantee of quality and do not ensure due disclosure.
- Serious failures of disclosure in relation to studies which the
IPCC has drawn on.
- Basic errors in the handling of data, allied to failure to
consult or involve trained statisticians.
- Failure to ensure an adequate range of views and expertise.
- Failure to take due note of critics in the preparation of the
- Failure on the part of the Panel and the IPCC directing circle to
recognise and deal with the above deficiencies.
These professional shortcomings have recently been documented, in
relation to key chapters in the report of Working Group I which forms
the first volume of AR4, in an article by David Holland in the journal Energy and Environment.
In this connection, I would also like to highlight the work of two
Canadian authors who are among those cited by Holland, namely, Stephen
McIntyre and Ross McKitrick. Both separately and in joint writings,
these two authors have made an outstanding contribution to public
How is one to explain the disturbing state of affairs that I have just
described? I have a straightforward answer. I believe that the flaws in
the IPCC reporting process, as in the advisory process as a whole, can
be largely accounted for by a pervasive bias on the part of the people
and organisations that direct and control it. From the earliest days,
members of the environmental policy milieu and the IPCC directing
circle, as also of the Panel itself, have been characterised by what my
friend Clive Crook, writing in the Financial
Times, has termed ‘pre-commitment to the urgency of the climate
cause’. The advisory process is run today, as it has been from the
start, by true believers.
It is not only within the environmental policy milieu that this
ingrained bias is to be found. Elements within the international
scientific establishment appear as strongly committed, rather than
neutral and objective, in relation to climate change issues. One aspect
of this strong commitment has been a readiness to describe dissenters
as ‘undermining’ established science, and to portray them as members of
‘an active and well-funded “denial lobby”’: they are treated (to use
George Orwell’s term) as Thought Criminals. In part, the bias arises
from uncritical adherence to global salvationist presumptions and
beliefs, as evidenced for example in some ill-informed recent
pronouncements on the world economy by leading scientists who have been
involved in the climate change debate.
Let me now summarise my second heading of dissent. I believe that
currently received opinion on climate change issues, official and
unofficial, embodies over-presumptive conclusions which are biased
towards alarm. These take as their point of departure the results of a
flawed process, and they represent a dubious extension of those results.
The chief moral to be drawn for policy is a simple one. In relation to
climate change, there is a clear present need to build up a sounder
basis for reviewing and assessing the issues. Governments should try to
ensure that they and their citizens are more fully and more objectively
informed and advised. A new
framework is needed - less presumptive,
more inclusive, more watertight professionally, and more attuned to the
huge uncertainties that remain.
Where so much remains uncertain and unsettled, policies should be
evolutionary and adaptive, rather than presumptive; and their evolution
should be linked to a process of inquiry and review which is more
thorough, balanced, open and objective than is now the case.
Post-script: a story of failure
From the published material that I have seen, there is no sign that the
grounds for concern that I have outlined above are shared, or even that
the possibility that they might exist is recognised, in any of the
central economic departments of state across the world – the
treasuries, ministries of finance or economics, and, in the US, the
Council of Economic Advisers. This is not a good situation. One of the
few things that are agreed in relation to climate science issues is
that the economic stakes, and the possible costs of mistaken policies,
could be very high. This places a responsibility on those departments
and agencies – as also, it could be argued, on the advisory units
working directly for heads of government – to make informed assessments
of their own, and not simply to take on trust and in full the received
opinions of the environmental policy milieu and its chosen instruments
– even when those opinions are endorsed from the outside by eminent
scientists and scientific bodies.
I am myself a former British Treasury official; and much later, as Head
of what was then the Economics and Statistics Department in the OECD
Secretariat, I had close dealings over a number of years with economics
and finance ministries in OECD member countries. I have been surprised
by the failure of these ministries to get to grips with climate change
issues, their uncritical acceptance of the results of a process of
inquiry which is so obviously biased and flawed, and their lack of
attention to the criticisms of that process that have been voiced by
independent outsiders – criticisms which, as I think, they ought to
have been making themselves.
The same failures of omission are currently to be seen in the
newly-expanded work programmes on climate change issues in both the
OECD and the IMF 8.
Altogether, this is a poor show.
1 Formerly Head of the Economics and Statistics
Department of the OECD, and currently a Visiting Professor at the
Westminster Business School, London.
2 The ‘champagne glass’ diagram that he presented,
which purports to show the distribution of world GDP by income groups,
is not only many years out of date but wholly misleading, since the
underlying data take the form of invalid exchange rate-based
comparisons of cross-country GDP. The diagram has long ago been
prudently laid to rest by the organisations that invented and
3 Mohan Munasinghe and Rob Swart, Primer on Climate Change and
Sustainable Development, Cambridge University Press, 2005, p. 4.
4 From late 2002 on, Ian Castles and I jointly put
forward a critique of some leading aspects of the IPCC’s economic work,
and in particular of the scenarios that provided emissions projections
for both the third and fourth Assessment Reports, while authors
involved in that work contested our criticisms. Following these
exchanges, we published in 2005 a joint paper on international
comparisons of GDP, and I reviewed and carried further the whole debate
in a later article published in Energy and Environment (Vol 16.
No. 3 & 4, 2005).
5 David Holland, ‘Bias and Concealment in the IPCC
Process: The “Hockey-Stick” Affair and Its Implications’, Energy and
Environment, Vol 18, No 7 & 8, 2007.
6 McKitrick’s website provides an annotated list of
references, while McIntyre’s blog is a continuing source of analysis
7 The argument of this paragraph is spelled out, with
supporting evidence, in a paper of mine entitled ‘Governments and
Climate Change Issues: The case for rethinking’, published in World
Economics, Vol. 8 No. 2, April-June 2007. The relevant sections
are on pp. 206-7 and 219-24. The words quoted in the above
paragraph are from a review article by Lord May, a past President of
the Royal Society.
8 This last aspect is considered in
an article of mine entitled ‘New Light or Fixed Presumptions? The OECD,
the IMF and the treatment of climate change issue ’, published in World
Economics, Vol. 8 No. 4, October-December 2007.
Posted 20 March 2008