Climate change
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4.4 Stern review
A report prepared by Nicholas Stern, chief economist for the UK Government in
2005, catalogued the economic impacts of climate change under a range of emission
scenarios. A summary of the findings is given in Figure 10 below. These results were
a jolt to governments and businesses worldwide. Stern’s report, coupled with the film
An Inconvenient Truth (promoted by former American VP Al Gore, who jointly won the
Nobel prize with the IPCC), was largely responsible for the massive swing in public,
corporate and governmental opinion towards accepting the issue of climate change.
Figure 10 - Stern report
TEMPEraTUrE
• Carbon emissions have already pushed up global temperatures by 0.5°C.
• If no action is taken on emissions, there is more than a 75% chance of global
temperatures rising 2–3°C over the next 50 years.
• There is a 50% chance that average global temperatures could rise by 5°C.
EnVIrOnMEnTaL IMPaCT
• Melting glaciers will increase flood risk.
• Crop yields will decline, particularly in Africa.
• Rising sea levels could leave 200 million people permanently displaced.
• Up to 40% of species could face extinction.
• There will be more examples of extreme weather patterns.
ECOnOMIC IMPaCT
• Extreme weather could reduce global gross domestic product (GDP) by up
to 1%.
• A 2–3°C rise in temperatures could reduce global economic output by 3%.
• If temperatures rise by 5°C, up to 10% of global output could be lost. The poorest
countries would lose more than 10% of their output.
• In the worst case scenario global consumption per head would fall 20%.
• To stabilise at manageable levels, emissions would need to stabilise in the next
20 years and fall between 1% and 3% after that. This would cost 1% of GDP.
OPTIOnS FOr CHanGE
• Reduce consumer demand for heavily polluting goods and services.
• Make global energy supply more efficient.
• Act on non-energy emissions – preventing further deforestation would go a long
way towards alleviating this source of carbon emissions.
• Promote cleaner energy and transport technology, with non-fossil fuels accounting
for 60% of energy output by 2050.
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