There's nothing innumerate about Hammond's £1 trillion bill for climate change avoidance

There’s a not so subtle important detail to the arguments about the costs of avoiding climate change. Between whether that avoidance is worth it and whether it will have costs. That detail being the thing that is being glossed over here by Ambrose Evans Pritchard:

Hammond's £1 trillion bill for hitting net zero is innumerate nonsense

As ever we’re just assuming that the standard science here is correct. Stern, Nordhaus, that the economics of the situation is as they say - and we’re not getting into discussions of whether the underlying climate part of climate science is right or wrong.

We’ve two entirely different points to consider here. The first is whether there are costs to trying to avoid climate change? Yes, obviously and of course there are. Stern himself tells us we need to spend 1 or 2% of GDP on that avoidance. That’s a cost. Pulling down extant coal fired power stations to replace with windmills has a cost. Throwing out every gas boiler and space heater - there’s even an insistence out there that every cooker must go - to replace with electric has a cost.

There simply are costs here.

The second and different question is whether those costs are worth it? It could be that we agree with Stern’s reading of what the discount rate should be, what we now owe that future, could be we don’t. That is though a very different question.

There simply is no doubt that there’s a bill to be paid now to avoid climate change while the benefits of having avoided it come later. Actually, those benefits not only come later they come to other and richer people.

Do note that this distinction still allows of any answer that pleases you to the second question. But the answer to the first is clearly and obviously yes.

Think the logic through for a moment. Buying a house now on a 30 year mortgage means that in 2049 we’ll be living rent free - a benefit. That doesn’t change the fact that handing over the cash now, or financing the loan over those decades, is a cost now, does it?

The importance of the distinction being as Stern himself has pointed out. If we decide to use expensive means of gaining that future benefit then we will do less of that avoidance. Simply because that’s what we humans do, less of more expensive things. Which is the argument in favour of not having grand plans to replace everything, overturn the structure of society and so on. These things are more expensive than just dealing with the specific problem to hand. Therefore if we try them then we’ll do less of that actual aim, avoidance of climate change.

Another way to put this is that of course there are costs to avoiding climate change. If it was all painless then we’d not have the original problem, would we? And that people are arguing that the law must be changed to force us to change our behaviour is all the evidence we need that avoidance is not a zero cost path of action. Because if it were that lowest cost path then we’d all be doing it without compulsion, wouldn’t we?