economicsofglobalwarming

Economics Of Global Warming

The economics of global warming relates to the size and distribution of the economic costs and benefits of global warming and of a variety of actions aimed at the mitigation of global warming. Estimates come from a variety of sources, including integrated assessment models, which seek to combine socio-economic and biophysical assessments of climate change.

Economics Of Global Warming

The Stern Review on the Economics of Climate Change is a report on the effect of climate change and global warming on the world economy compiled by economist Sir Nicholas Stern for the government of the United Kingdom. Released on October 30, 2006, and containing over 700 pages, the Stern Review is one of the first major government-sponsored reports on global warming conducted by an economist and not an atmospheric scientist.

Its main conclusions are that one percent of global GDP is required to be invested in order to mitigate the effects of climate change, and that failure to do so could risk a recession worth up to twenty percent of global GDP.

Stern’s report suggests that climate change threatens to be the greatest and widest-ranging market failure ever seen, and it provides prescriptions including environmental taxes to minimize the economic and social disruptions. He stated that "our actions over the coming few decades could create risks of major disruption 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."

Positive Response

The Review attracted a great deal of positive attention.

Reactions from experts in UK included professor Bill Mcguire of Benfield UCL Hazard Research Centre who said that Stern has greatly underestimated the effects of global warming. Pia Hansen, a European Commission Spokeswoman, said doing nothing is not an option, "we must act now". Simon Retallack of the UK think tank IPPR said "This removes the last refuge of the 'do-nothing' approach on climate change, particularly in the US." Tom Delay of The Carbon Trust said "The Review offers a huge business opportunity." Richard Lambert, Director General of the Confederation of British Industry, said that a a global system of carbon trading is "urgently needed". Charlie Kronick of Greenpeace said "Now the government must act and, among other things, invest in efficient decentralised power stations and tackle the growth of aviation."