Econ: Stern Review

Stern Review on the Economics of Climate Change

• Stabilisation at safe levels will cost 1% of GDP p.a. if we act now;
• Failure to act will cost 5%-20% of GDP p.a. in perpetuity.

The key conclusion of the Stern Review is: Act now, don’t wait. Because acting now costs less than doing nothing.

Or in CC jargon: mitigation is preferable to adaptation.

A summary of the impacts considered by the Stern Review for different CC induced temperature increases:

The Review found that if we do nothing about climate change (‘business as usual’), the damage bill will be between 5% and 20% of global GDP p.a.

In contrast, taking action to fix the problem costs much less than doing nothing. Action taken to reduce greenhouse gas emissions to safe levels will only cost 1% of GDP p.a.

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