What could climate change cost us?

Nicholas Stern, former vice president of the World Bank and leader of the team that producedThe Stern Review Report on the Economics of Climate Change. Credit: British Embassy Jakarta

Nicholas Stern, former vice president of the World Bank and leader of the team that producedThe Stern Review Report on the Economics of Climate Change. Credit: British Embassy Jakarta

People across the world work hard to earn money and are likely to react angrily if anyone, from taxman to thief, tried to take away that cash. From that viewpoint, perhaps the investment and sacrifice needed to avoid dangerous climate change make people question whether or not it’s really happening. But if climate change affects how we live, there will be costs associated with that too. The person who cares about cash above all else might then ask: will it cost me more if I try and stop climate change, or if I do nothing?

The Stern Review Report on the Economics of Climate Change, published in 2006 by the British government, is the highest profile effort to answer questions like this so far. Its verdict: “The benefits of strong, early action considerably outweigh the costs.” Compared to the damage that would be caused if nothing is done to tackle climate change, aiming to stabilise atmospheric CO2 concentrations at 550 parts per million (ppm) would provide benefits that could be valued at $2.5 trillion, and would increase with time. That’s more than the the gross domestic product – the total value of all goods and services produced, abbreviated as GDP – of the United Kingdom in 2009. In 2009, by one measure global GDP was $70 trillion.

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