Welcome to Cato Daily Podcast. I'm Anastasia Yuglova, your host. In today's

podcast we'll talk to Cato Senior Fellow Jerry Taylor about his take on the

Stern Review on the Economics of Climate Change, a report that was released some weeks ago.

What does the stern review on the economics of climate change say about global warming?

Well the stern review was released in early November and what it argues is that if we leave

greenhouse gas emissions unaddressed a business as usual scenario would lead to

anywhere between a 5%

10% reduction in global GDP every single year

from about 50 years out through the rest of time.

It also argues that that revenue of that income loss could actually exceed 20% of

global GDP under certain circumstances as well. Now what made this very interesting

is that Stern argued that the losses from doing nothing are quite dramatic, but that we could

head off most of those losses by spending about 1% of global GDP in greenhouse gas emissions

controls.

So he was essentially selling an insurance policy.

Spend 1% of GDP now to offset the possibility

or almost the certainty of losing at least 5% of global GDP

every year, 50 years hence, or maybe even up to 20.

What's interesting is that it's not as if economists haven't looked at this sort of an issue

in the past, and there's a mountain of academic research on it, and Stern's calculations are very high compared to

those of say Bill Nordhouse at Yale or other economists who believe that a

business as usual scenario in other words assume that we ignore Al Gore's warnings and we

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