So, My Noble Lord Stern said that we can beat climate change at a cost of 1-2% of the economy per year. This should be done by imposing green taxes: Pigou taxes as they are technically called.
Green taxes already make up 7 per cent of the Government\’s tax take.
The government\’s tax take is somewhere around 40% of the total economy meaning that those green taxes are currently some 2.8% of the economy.
Thus we\’re done. We\’ve solved climate change.
Or, of course, for those arguing that we should be taxed more, we have to assume that they don\’t believe Lord Stern\’s pronouncement that it can all be done for 1-2% of GDP. And given that Nicholas Stern is one of those who insist that taxes should be higher, nor does he believe his own report.
Bit of a conundrum really: if we believe the report that says that we can solve climate change at that price, then we\’re already doing it. If we insist that taxes should be higher than the report said, then of course the cost benefit analysis in the report is not to be believed.