A Note on the Ethical Implications of the Stern Review on the Economics of Climate Change

Abstract

The Stern Review on the economics of climate change 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. In the long term, this might see the richest 10% of the world's population facing an average redistributive tax rate in the region of 82%.