The Economics of Climate Change: The Stern Review

This 700-page report is accessible for non-specialists – and the various sections or the whole volume can be accessed on the web or downloaded at no charge (see above for details). It is divided into five parts. Part I reviews the nature of the scientific evidence for climate change and emphasizes the overwhelming body of scientific evidence that shows how this is an urgent issue. Part II considers its impact on growth and development, including the economic impacts. Part III discusses the economics of stabilizing greenhouse gas concentrations in the atmosphere, including the costs of mitigation – and the opportunities and wider benefits that can come from climate policies. Part IV discusses policy responses for mitigation, including the use of carbon pricing and emissions markets, and accelerated technological innovation. It also discusses policy responses for adaptation, with separate sections for adaptation in high-income nations and in low- and middle-income nations. It notes the following: “Only a few credible estimates are now available of the costs of adaptation in developing countries, and these are highly speculative. In a world of rapid climate change, it is increasingly difficult to extrapolate future impacts from past patterns, so historical records are no longer reliable guides. Furthermore, the discussion above has shown that conceptually this is a difficult calculation to solve: adaptation is so broad and cross-cutting – affecting economic, social and environmental conditions and vice versa – that it is difficult to attribute costs clearly and separately from those of general development finance. Adaptation should be undertaken at many levels at the same time, including at the household/community level and many of these initiatives will be self-funded” (pages 501–502).

The book’s final part is on international collective action – which includes sections on creating a global price for carbon, supporting the transition to a low carbon global economy, promoting international technology cooperation, reversing emissions from land use change and international support for adaptation. Among its main conclusions:

- There is still time to avoid the worst impacts of climate change if strong action is taken now – and the costs of this action are much less than the costs that will arise from no action, as a result of the direct and indirect impacts of climate change.
- Action on climate change is required across all countries and it need not cap the aspirations for growth of rich or poor countries.
- There needs to be an international response based on a shared understanding of long-term goals and agreement on frameworks for action.
- The poorest countries are most vulnerable to climate change – and it is essential that climate change be fully integrated into development policy and that rich countries honour their pledges to increase support through development assistance.