THE WARNINGS rain down about climate change, but we devote as much human ingenuity to making excuses as to finding solutions. The sceptics have lost the scientific battle: the world’s climate scientists are now categoric that the Earth is warming, due in part to our burning of fossil fuels. So the sceptics have shifted their attacks to economics..

We would be better off, they say, simply adapting to a warmer world and finding better uses for the money we might have spent on rescuing the environment.

But whatever response we make to global warming will be a gamble — and the most foolish gamble of all would be to keep procrastinating until some number cruncher has modelled the Universe.

If you think that climate change is the result of a series of accounting errors caused by our failure to price in the true costs of burning fossil fuels, you may feel doubtful about inviting a bunch of accountants to put a price on all the hurricanes, floods, failed crops, extinct species and displaced people expected to result from global warming during this century. Try to put a value on “Life, the Universe and Everything”, and you will get an answer that is as meaningful as 42.

Yet this is what is advocated by so-called “rationalists” reacting to what they believe is an anti-capitalist conspiracy. Björn Lomborg, the self-styled “sceptical environmentalist”, has received enormous publicity for calculating that global warming will cause $5 trillion of damage, and would cost $4 trillion to avoid.

These are such vast sums of money, he argues, that we would be better off spending the cash instead on tackling problems such as HIV/Aids. Mr Lomborg and his ilk deserve credit for asking tough questions of activists who have too often chosen the facts to suit their arguments. And they are right to argue for the most cost-effective solutions, which will not necessarily be the one-size-fits-all Kyoto Protocol. But their use of cost-benefit analysis to rank climate change against other global challenges is too crude. What the world needs from economists are sophisticated hedging strategies, not glib publicity stunts.

The first mistake the “rationalists” make is to assume that climate change is linear, not accelerating. But we simply do not know how the Earth will respond to increasing atmospheric concentrations of carbon dioxide. Which is why most economists consider the cost of climate change to be much more uncertain than the costs of controlling it.

Climate scientists are much more ready to talk about the possibility of “runaway warming” — for example, if arctic temperatures rise so much that they release the methane trapped below the permafrost. If that were to happen, we’ll be worrying not just about vanished polar bears but whole regions rendered unsuitable for food production and millions of famine refugees.

The second mistake is to attempt to separate poverty from climate change, when the two are so intimately linked. Climate change will hit poor nations earliest and hardest: it is likely to become a major source of conflict between rich and poor. But when temperature rises are expected to alter monsoon patterns in Asia, reducing crop yields and creating millions of famine refugees, it makes little sense for Lomborg and his colleagues to baldly prioritise “hunger” over “ climate”.

The third mistake is to assume that controlling climate change threatens capitalism. The terror of limiting fossil fuel consumption drives much sceptic fervour. But it is misplaced. Climate change is already expensive. Nine out of the 10 most costly insured weather catastrophes since 1970 have occurred in the past 15 years, as hurricanes and floods grow stronger. Swiss Re, the global re-insurer, has ordered its clients to devise strategies for handling global warming or risk losing their liability coverage.

And climate change represents a huge business opportunity. Toyota is three years ahead in the race to make green fuel cars, with its hybrid Prius. China is worried about the security of its oil supplies and would be a large enough market to give such cars the scale they need to succeed. Solar energy is growing as fast as did the mobile phone industry in the early 1990s, and every doubling in sales reduces costs by about 10 per cent. Some onshore wind power is now price-competitive with fossil fuels, though investors still worry about the newness of the technology.

Governments need to give the right market signals to encourage more investment in such technologies. This is not anti-capitalist, although it will pose difficulties for the oil industry, which cannot simply uproot its heavy investments in infrastructure. It is not anti-growth, because smart carbon taxes unlike dumb windfall levies can be offset by lower income tax. However, it will upset those who are wedded to the idea that they should drive, fly and heat their homes at the expense of the climate. Politicians fear them more than the oil companies.

Any response to climate change is a risk. But we took a bigger risk a long time ago. We have been performing a gigantic experiment on the Earth’s climate ever since the Industrial Revolution. It is time for those on the Right to turn their minds to what they do best: stop griping about fuel duty and help transform a mind-blowing risk into a growth opportunity.

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