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The Stern Review on the Economics of Climate Change
The Stern Review, released on October 30, 2006, provides the most thorough and rigorous analysis to date of the costs and risks of climate change and reducing emissions and convincingly argues that the benefits of strong, early global action to mitigate climate change will be far lower than the costs. Among its conclusions:
-- Climate change will affect the basic elements of life for people around the world - access to water, food production, health, and the environment. Hundreds of millions of people could suffer hunger, water shortages and coastal flooding as the world warms.
-- Climate change could have very serious impacts on growth and development. If no action is taken to reduce emissions, the concentration of greenhouse gases in the atmosphere could reach double its pre-industrial level as early as 2035, virtually committing us to a global average temperature rise of over 2°C. In the longer term, there would be more than a 50% chance that the temperature rise would exceed 5°C. Such a radical change in the physical geography of the world would lead to major changes in the human geography - where people live and how they live their lives.
-- If we don't act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more. In contrast, the costs of action - reducing greenhouse gas emissions to avoid the worst impacts of climate change - can be limited to around 1% of global GDP each year.
The report was prepared by Lord Stern, then head of the UK Government Economic Service and now chair of the Grantham Research Institute on Climate Change and the Environment and IG Patel professor of economics and government at the London School of Economics and Political Science.
Full Report: http://www.hm-treasury.gov.uk/stern_review_report.htm
Executive Summary (long): http://www.hm-treasury.gov.uk/d/Executive_Summary.pdf
Executive Summary (short): http://www.hm-treasury.gov.uk/d/CLOSED_SHORT_executive_summary.pdf