In a missioned by the UK government, Sir Nicholas Stern, a former chief economist of the World Bank, argues that the cost of waiting to take action to curb CO2 emissions will outpace other economic arguments against action on climate change.

The BBC reports (HT: Slashdot) that Stern found “that global warming could shrink the global economy by 20%,” but that this opportunity cost for not taking action immediately could be offset by moving now: “Taking action now would cost just 1% of global gross domestic product, the 700-page study says.” This is essentially the same economic argument I’ve previously used against action on climate change, but reversed to endorse action.

UK prime minister Tony Blair echoed the report’s conclusions, “For every ਱ invested now we can save ਵ, or possibly more, by acting now.”

“We can’t wait the five years it took to negotiate Kyoto – we simply don’t have the time. We accept we have to go further (than Kyoto),” Blair said.

The BBC claims that Stern’s report “is the first major contribution to the global warming debate by an economist, rather than a scientist.” This may be true in a sense, but the Copenhagen Consensus of 2004 embodies the conclusions of a number of economists, although it does not, in point of fact, examine the issue at a length in excess of 700 pages.

The conclusions of the consensus differ from Stern’s. Robert W. Fogel writes, “The environment is considered to be important, but it is not yet time to do anything massive about climate change. But with continued research and development (R&D) it will be possible to address future catastrophes and climate change mitigation and adaptation.”

Vernon L. Smith concludes, “It is clear from both the science and the economics of intervention that those of us who care about the environment are not well advised to favour initiating a costly attempt to reduce greenhouse gases (ghgs) build-up in the atmosphere in the near future based on available information. Although the ultimate dangers may turn out to prompt action, the current evidence indicates that it is much too soon to act relative to the many other important and pressing opportunities that demand immediate attention.”

The group’s consensus is, however, that our knowledge of the problem and potential solutions will increase over time, so that they leave open the possibility of mending action in the future. Nancy L. Stokey sums it up well: “Future decision makers will be better equipped to decide whether more aggressive action is needed.”

Is two more years long enough? Have we learned enough in the intervening period to give greater weight to Stern’s conclusions?

One other item that Stern notes is that he’s hopeful about the possibility of curbing climate change. “I’m optimistic – having done this review – that we have the time and knowledge to act. But only if we act internationally, strongly and urgently,” he says.

Stern puts the emphasis on acting internationally. “Unless it’s international, we will not make the reductions on the scale which will be required,” says Stern. Just what international organization is envisioned as the arbiter of global climate change policy? The UN? The WTO? Or some as-yet uncreated entity, a la the Kyoto Protocol?

In the review summary (PDF), Stern writes, “The UN Framework Convention on Climate Change (UNFCCC), Kyoto Protocol and a range of other informal partnerships and dialogues provide a framework that supports co-operation, and a foundation from which to build further collective action.”

Update: Arnold Kling adds mentary on the report over at EconLog.

Futher Update: Not too surprisingly, an OPEC spokesman contends that the Stern report propounds “scenarios that have no foundations in either science or economics.”