So who should listen to Lord Stern about global warming economics? He doesn’t seem believe that, as demonstrated in the U.S., greater supply of natural gas leads to lower prices.
The Belfast Telegraph reports:
Lord Stern, author of the hugely influential Stern review on the financial implications of climate change, has dismissed David Cameron’s claims that a fracking boom in the UK can bring down the price of gas in the UK as “baseless”.
In an interview with The Independent, the respected economist said he was puzzled by the prime minister’s claim this month that “fracking has real potential to drive energy bills down… gas and electric bills can go down when our home-grown energy supply goes up”.
“I do think it’s a bit odd to say you know that it will bring the price of gas down. That doesn’t look like sound economics to me. It’s baseless economics,” said Lord Stern, chair of the Grantham Research Institute on Climate Change at the London School of Economics.
Gas is a commodity that can be traded on the international market, meaning that it will be sold to the highest bidder, whether inside or outside the UK. As a result, any shale gas boom in the UK would be unlikely to have an impact on the world price, Lord Stern said…