Geoffrey Lean - yes, yes, we know - tries to tell us about climate economics.

The Cop28 president told a shocking lie about fossil fuels – and he’s wrong about climate economics too

Wrong, eh?

Study after study has revealed the immense potential. One, by Deloitte for the World Economic Forum, concluded that a transition to net zero could benefit the world economy by $43 trillion over the next five decades.

A commission of some of the world’s top businesspeople and financiers decided that similar measures could create 380 million jobs.

Jobs are a cost, not a benefit. Having to direct human labour to some task reduces the amount of such human effort that can be devoted to sating some other desire - it’s a cost. So that boast is that dealing with climate change would add 380 million costs to the global economy. Yes, obviously, this is an opportunity cost but if you’re not doing opportunity costs then whatever you’re doing it’s not economics.

The Deloitte claim is here. The “bad” outcome they’re testing against is SSP2 6.0. That’s a target we’re already going to hit, we’re - roughly, you understand - on RCP 4.5 or so at present. But rather more importantly:

$178 trillion in global economic losses Net present value terms to 2070 in US dollars

Ah. So, divide by 50 years (yes, ignoring discounting, aren’t we such terrors?) to give $3.4 trillion a year. Perhaps 3% of global GDP currently. And very much more like 1 to 2% in 2070 - yes, all these forecasts assume that the global economy will continue to grow over the decades. For the loss being detailed is the cumulative loss, not the annual.

So, one thought is that this is a fraction of the Stern Review loss of 5% (an annual number off in that future) and so Deloitte is telling us that climate change is very much less of a problem than Stern did. Which is interesting.

Rather more apposite we think is that we don’t, in fact, know current GDP to within 1%. Whether or not we add drugs and commercial sex or not moves the number by that much. Imputed rents (what people don’t pay for living in the houses they own) is multiples of that. The difference between the first estimate of the monthly GDP numbers and the final count 6 or whatever months later can be 0.5% of GDP. Claims about a few percentage points 50 years out strike us as little more than a demonstration of a sense of humour.

As with Peter Lilley we’re fine with what people tell us about the physics of climate change. But the economics of it all is much more marginal. Leave aside the deluded who think that job creation is anything other than a cost. The reason that the Nordhaus and Stern analyses insist that we must do this the cheap and efficient way is that the difference - absent a Venus-syle runaway - is marginal. It’s a few percent either way. Therefore the efforts cannot, logically, be more than a few percent either way for if they are then the costs will be greater than any possible benefits.

The actual economics of climate change does tell us that avoiding disaster is a pretty good idea. After that it’s all rather a marginal issue.