Skeptical Science has an excellent point-by-point response to the WSJ letter.
I would really like to highlight Skeptical Science's wonderful "escalator" graphic illustrating the difference between the long-term trend and short-term variation:
As we can see, looking at the whole data set rather than a carefully selected subset, the upwards trend continues unabated.
If you read Trenberth's email, you'll see that he was, at the point that they quoted from, was discussing his paper An imperative for climate change planning: tracking Earth’s
Energy can be neither created nor destroyed. Satellites observe more energy coming into the Earth's atmosphere than is leaving. And yet, despite a relatively constant buildup in energy in the Earth system, the temperature rise isn't constant, there's a lot of natural variability. Trenberth isn't happy with just categorising this as "natural variability".
It is not a sufficient explanation to say that a cool year is due to natural variability. Similarly, common arguments of skeptics that the late 20th century warming is a recovery from the Little Ice Age or has other natural origins are inadequate, as they do not provide the physical mechanisms involved. There must be a physical explanation, whether natural or anthropogenic. If surface warming occurs while the deep ocean becomes cooler, then we should be able to see the evidence.
Trenberth then goes about documenting the movement of energy amongst the parts of the Earth's various systems. However, current observation networks, in particular a shortage of deep ocean buoy coverage, mean that there is not sufficient data available for Trenberth to document where all the heat is going.
Many components of the Earth system play some role, and their monitoring is improving but falls short of what is required... Hence observations need to be taken in ways that satisfy
the Global Climate Observing System climate monitoring principles and ensure long-term continuity and that have the ability to discern small but persistent signals.
Subsequent papers, incidentally, such as von Schuckmann et. al. 2009, indeed, support this suggestion, showing that deeper waters are, in fact, sequestering more heat than previous expected. Even without that - Trenberth wants to collect data that would allow a potential falsification test and to allow medium-term variability to be better understood. Good things to aim for in my view - and certainly not a basis for claims that global warming has stopped.
It is true that plants and animals did originally evolve at a time when CO2 levels were much higher. However, at the time the temperature of the Earth was also much higher. And under such a high-temperature regime, giant reptiles were able to wander the Earth eating everything. It's a long way to go from saying "plants and animals evolved when CO2 concentrations were about 10 times larger" to saying "it would be neat idea to recreate those conditions".
More testably, this is wrapped up in an argument that increased CO2 levels would be good for crop production - that plants can be grown in greenhouses under increased levels of carbon dioxide. This is true as far as it goes, but is a vast oversimplification. Some crops may do well, but there are limiting factors other than carbon dioxide. Climate change can negatively affect the availability of nutrients and moisture, as well as inducing heat stress - which will cause reductions in crop growth   .
Meanwhile, scientists have studied the effects of increased CO2 availability on open-air plants - a much more realistic test.
Leakey et. al. (2009):
FACE on the other hand, which allows treatment of plants under field conditions at a realistic scale, has provided an important reality check. It has both shown where hypotheses developed in controlled environments do or do not apply, as well as insights into the mechanisms that may cause the difference. Overwhelmingly, this has shown that data from laboratory and chamber experiments systematically overestimate the yields of the major food crops, yet may underestimate the biomass production of trees.
Long et. al. (2006):
The CO2 fertilization factors used in models to project future yields were derived from enclosure studies conducted approximately 20 years ago. Free-air concentration enrichment (FACE) technology has now facilitated large-scale trials of the major grain crops at elevated [CO2] under fully open-air field conditions. In those trials, elevated [CO2] enhanced yield by ∼50% less than in enclosure studies. This casts serious doubt on projections that rising [CO2] will fully offset losses due to climate change.
The final claim in the question was the claim that aggressive controls are not economically justified, for which they cite research by economist William Nordhaus. However, when journalist Andy Revkin actually contacted Nordhaus to see what he thought of the conclusions being attributed him, here's what Nordhaus had to say:
The piece completely misrepresented my work. My work has long taken the view that policies to slow global warming would have net economic benefits, in the trillion of dollars of present value. This is true going back to work in the early 1990s (MIT Press, Yale Press, Science, PNAS, among others). I have advocated a carbon tax for many years as the best way to attack the issue. I can only assume they either completely ignorant of the economics on the issue or are willfully misstating my findings.