Climate Change and the Stern Review - January 2007

Climate Change and the Stern Review - January 2007

The UK government's Stern Review, released in October 2006, is a report detailing the economic impacts of climate change.
According to the Review, if greenhouse gas emissions are not curbed, the average global temperature will rise by up to 5°C by the end of the century,
The associated economic losses are projected to range from 5% to 20% of global GDP.
In particular, the melting of the Greenland ice sheet in the Arctic and the Siberian permafrost could have catastrophic effects on ecosystems and humanity.

The Stern Review found that carbon dioxide emission equivalents (CO₂e) have increased from 280 ppm in the pre-industrial era to 430 ppm today,
It notes that it is rising at a rate of 2 ppm per year.
To limit this to 450-550 ppm, the review recommended that policies based on carbon pricing (emissions trading and carbon taxes), research and development and diffusion of low-carbon technologies, and promotion of energy conservation are essential.

In addition, the United Kingdom is expanding its emissions trading market, with London serving as a center in this area.
Furthermore, the development of energy-efficient technologies is progressing, and companies such as BP and Shell are promoting the development of markets for products and services that utilize low-carbon technologies.
The review credits these initiatives with creating new jobs and accelerating economic growth.

In particular, the EU has set a goal of reducing greenhouse gas emissions by 20% below 1990 levels by 2030, and European industry has responded positively.
While these policies are advancing mainly in developed countries, it has been pointed out that efforts in developing countries are insufficient, and there is a need for the establishment of an international cooperative framework.

Verification of Stern Review Projections

The Stern Review emphasized the impact of climate change on the economy and the need for early action.
However, the 2023 analysis shows that the climate-related economic losses projected by the Review have not actually increased,
The amount of damage as a percentage of GDP has remained flat or decreased.
This is due, among other factors, to the fact that no severe typhoons or hurricanes have been observed.
For this reason, it has been suggested that the Stern Review's projections were overstated.

On the other hand, the impacts of climate change vary by region and sector, including impacts on agriculture and ecosystems, and damage from sea level rise,
In some areas, economic losses have become apparent.
In addition, the introduction of renewable energy and promotion of energy efficiency as climate change countermeasures,
economic growth and job creation.

In general, though, the Stern Review's projections were partly overstated,
However, the risks of climate change still exist, and measures must continue to be taken.