Stern Review publishes conclusions

Thursday, 11 January 2007 The Stern Review on the Economics of Climate Change has concluded that it would be more cost-effective to take action to reduce greenhouse gas emissions than to deal with the impacts of unmitigated climate change.

The Review concluded that unabated climate change risks raising average global temperatures by 5°C, resulting in reduced crop yields, increased flooding, extinction of up to 40% of species and more examples of extreme weather patterns.

Such effects would reduce the global gross domestic product (GDP) by between 5 and 20%. In contrast, action to reduce greenhouse gas emissions to avoid the worst of the effects would result in a reduction of 1% in global GDP.

The report recommended actions required to reduce emissions, including reducing consumer demand for heavily polluting goods and services, making global energy supply more efficient, preventing further deforestation and promoting cleaner energy and transport technology, with non-fossil fuels accounting for 60% of energy output by 2050.

In addition, the report recommended that carbon emissions should be priced, with emissions trading systems identified as powerful ways of promoting cost effective emissions reductions, which should be extended to include major developing countries. Globally, support for energy research and development should at least double, and support for the deployment of low-carbon technologies should increase up to five-fold.

The Stern report highlights the role of low carbon generation as a mitigation option, including nuclear generation “if the waste disposal and proliferation issues are dealt with.” In supporting documents produced by Imperial College nuclear generation is judged to be one of lowest cost options for reducing greenhouse gas emissions in the electricity generation sector.

The report, commissioned by the UK Prime Minister Tony Blair and the Chancellor of the Exchequer Gordon Brown, was produced by a team led by Sir Nicholas Stern, advisor to the UK Government on the Economics of Climate Change and Development and former Chief Economist of the World Bank.

Further information

The Stern Review