HIGH COSTS.(The Talk of the Town)

Throughout the midterm campaign season, at least one major issue was conspicuously absent from debate. Except in California, where Governor Arnold Schwarzenegger reinvigorated his bid for reelection by vowing to reduce greenhouse-gas emissions, climate change was barely mentioned. This can't be wholly blamed on the politicians: according to a recent Pew Research Center survey, Americans still rank global warming as a low policy priority--far behind Iraq, the economy, and health care--with less than half of respondents designating it a "very important" issue.

Given the news out of Baghdad, it's only natural that people would choose to focus on catastrophes unfolding in real time, but the longer that global warming is ignored the more intractable it becomes--a point made forcefully last week in a report issued by the British government. Unless the nations of the world come together to control emissions, the report said, we face the risk of "major disruptions to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century."

The report's author, Sir Nicholas Stern, the head of Britain's Government Economic Service, is hardly a scaremonger. He combines a strong academic background--Cambridge, Oxford, and the London School of Economics--with practical experience. After the fall of Communism in Eastern Europe, he spent six years at the European Bank for Reconstruction and Development. From 2000 through 2003, he was the World Bank's Chief Economist. Last year, Gordon Brown, the Chancellor of the Exchequer, asked him to examine the economic consequences of climate change and make recommendations for what governments should do about it. The report Stern delivered, at six hundred pages, sets a new benchmark for policy discussion.

The Bush Administration and its ideological and corporate allies have downplayed the scientific evidence for global warming while complaining that taking on climate change in a major way would place too great a burden on the economy. Stern, who came to the subject fresh, dismisses these views. He says, "Climate change presents very serious global risks, and it demands an urgent global response."

At the launch presentation of his report, Stern pointed out that global warming is a textbook case of an "externality," in which the prices people pay for gasoline, electric power, and other energy products don't reflect their true costs, among them the impact of greenhouse gases. "Our emissions affect the lives of others," he explained. "When people do not pay for the consequences of their actions, we have market failure. This is the greatest market failure the world has seen."

There are a number of ways to deal with market failures, including taxes, regulation, and compulsory voucher schemes that force corporations and other organizations to pay for the negative side effects of their activities, such as environmental pollution. Bringing carbon emissions under control is such a mammoth task, Stern says, that all these remedies will be needed. By 2050, for example, at least sixty per cent of global power capacity will have to come from non-carbon sources, such as wind farms, solar cells, and nuclear reactors; at the moment, the proportion is less than twenty-five per cent. "Mitigation--taking ...