The Stern Review and its Critics: Economics at Work in an Interdisciplinary Setting

The Stern Review, Stern (2007), received a lot of attention upon its release. It also resulted in an intense and interesting debate within climate change economics. One of the central issues has been the question of the appropriate discount rate to use and more generally the proper role of ethics in an economic analyses of this kind. Some have argued against incorporating ethical considerations at all, while others argue that Stern did not involve ethics enough. There are also those who question whether Stern provided an economic analysis at all. This paper analyzes Stern (2007) and the surrounding debate from a methodological point of view. Basically three conclusions are reached. First, Stern involves a number of different kinds of interdisciplinarity based on the Mäki (2007) characterization of interdisciplinarity. Second, the interaction of economics and ethics is unavoidable within climate change research. Third, Stern uses a modified version of the standard economic approach to climate change and the deviations are well-motivated (that is, it is still a valuable economic analysis).