EXECUTIVE SUMMARY
STERNS REVIEW
THE ECONOMICS OF CLIMATE CHANGE
RENEWABLE ENERGY ENGINEERING
NYUMUAH JOEL
UE20028816
ASSIGNMENT 3
INTRODUCTION
The review was about how climate change presents risk to the human life
and environment.
The review had two evidences that examines the factors of the climate
change and they affect the environment.

The first examines the evidence on the economic impacts of climate
change itself and explores the economic of stabilizing greenhouse effect
in the atmosphere.

The second half of the review considers the policy challenges involved in
managing the transition to a low-carbon economy to ensure that
societies can adapt to the consequences of climate change that can
no longer be avoided.
THE BENEFIT AND COST OF ACTION TO REDUCE THE EMISSIONS OF
GREEN HOUSE GASES

Using disaggregated techniques, which is considering the physical
impacts of climate change on the economy, on human life and on the
environment, examine the costs of different technology and strategies to
reduce greenhouse gases.

Using economic models which is assessment models that estimate the
economic impact of climate change, the cost and effects of the
transition to low carbon in energy systems for the economy as a whole.
THE SCIENTIFIC EVIDENCE POINTS TO INCREASING RISKS OF SERIOUS
IMPACTS FROM CLIMATE CHANGE ASSOCIATED WITH BUSINESS-ASUSUAL(BAU) PATHS FOR EMISSIONS
The stock of greenhouse gas in the atmosphere are rising as a result of
human activities and these are,

The current level of greenhouse gases in the atmosphere is equivalent to
around 430 parts per million(PPM) carbon dioxide compared with only
280ppm before the industrial resolution.

These concentration have already caused the world to warm by more
than half a degree Celsius. Even if the annual flow of emissions did not
increase beyond today’s rate, the stock of greenhouse gases would
reach double pre-industrial level by 2050 at 5550ppm carbon dioxide
THE EFFECT OF GLOBAL WARMING

Melting glaciers will increase flood risk and the strongly reduce
water supplies.

Declining crop yields especially in Africa, could leave hundreds of
millions without the ability to produce sufficient food.

Rising sea level will result in tens to hundreds of million more people
flooded each year with warming of 3 degree Celsius.

In higher latitudes, cold-related deaths will decrease. But climate
change will increase worldwide deaths from malnutrition and heat
stress.
The cost of BAU would increase still further, were the model
systematically to take account of three important factors

First, including direct impacts on the environment and human
health(sometimes called ‘non-market’ impacts) increases our
estimate of the total cost of climate change on this path from 5%
to 11% of global per-capita consumption.

Second, some recent scientific evidence indicates that the
climate system may be more responsive to greenhouse-gas
emissions than previously thought, for example because of the
existence of amplifying feedbacks such as the release of methane
and weakening of carbon sinks.

Third, a disproportionate share of the climate-change burden falls
on poor regions of the world.
HOW GREEN HOUSE GASES CAN BE REDUCED
Greenhouse-gas emissions can be cut in four ways. Costs will differ
considerably depending on which combination of these methods is
used, and in which sector:
 Reducing demand for emissions-intensive goods and services.

Increased efficiency, which can save both money and emissions.

Action on non-energy emissions, such as avoiding deforestation.
 Switching to lower-carbon technologies for power, heat and
transport.
 Estimating the costs of these changes can be done in two ways.
One is to look at the resource costs of measures, including the
introduction of low-carbon technologies and changes in land use,
compared with the costs of the BAU alternative.
The second is to use macroeconomic models to explore the systemwide effects of the transition to a low-carbon energy economy. These
can be useful in tracking the dynamic interactions of different factors
over time, including the response of economies to changes in prices.
On the basis of these two methods, central estimate is that
stabilization of greenhouse gases at levels of 500-550ppm CO2e will
cost, on average, around 1% of annual global GDP by 2050. This is
significant, but is fully consistent with continued growth and
development, in contrast with unabated climate change, which will
eventually pose significant threats to growth
WHAT THE TRANSITION TO LOWER CARBON ECONOMY WILL BRING
There are also significant new opportunities across a wide range of
industries and services. Markets for low-carbon energy products are likely to
be worth at least $500bn per year by 2050, and perhaps much more.
Individual companies and countries should position themselves to take
advantage of these opportunities.
National objectives for energy security can also be pursued alongside
climate change objectives. Energy efficiency and diversification of energy
sources and supplies support energy security, as do clear long-term policy
frameworks for investors in power generation. Carbon capture and storage
is essential to maintain the role of coal in providing secure and reliable
energy for many economies
Policies on climate change can also help to achieve other objectives.
These benefits can significantly reduce the overall cost to the economy of
reducing greenhouse-gas emissions. If climate policy is designed well, it
can, for example, contribute to reducing ill-health and mortality from air
pollution, and to preserving forests that contain a significant proportion of
the world’s biodiversity.
Climate-change policy can help to root out existing inefficiencies. At the
company level, implementing climate policies may draw attention to
money-saving opportunities. At the economy-wide level, climate-change
policy may be a lever for reforming inefficient energy systems and removing
distorting energy subsidies, on which governments around the world
currently spend around $250bn a year.
ADAPTATION POLICY IS CRUCIAL FOR DEALING WITH THE UNAVOIDABLE
IMPACT OF CLIMATE CHANGE
Governments have a role in providing a policy framework to guide effective
adaptation by individuals and firms in the medium and longer term. There are
two key areas:

High-quality climate information and tools for risk management will help to
drive efficient markets. Improved regional climate predictions will be
critical, particularly for rainfall and storm patterns.

Land-use planning and performance standards should encourage both
private and public investment in buildings and other long-lived
infrastructure to take account of climate change.
CONCLUSION
There are ways to reduce the risks of climate change. With the right incentives,
the private sector will respond and can deliver solutions. The stabilisation of
greenhouse gas concentrations in the atmosphere is feasible, at significant but
manageable costs.
The policy tools exist to create the incentives required to change investment
patterns and move the global economy onto a low-carbon path. This must go
hand-in-hand with increased action to adapt to the impacts of the climate
change that can no longer be avoided.
Above all, reducing the risks of climate change requires collective
action. It requires co-operation between countries, through
international frameworks that support the achievement of shared
goals. It requires a partnership between the public and private sector,
working with civil society and with individuals. It is still possible to avoid
the worst impacts of climate change; but it requires strong and urgent
collective action. Delay would be costly and dangerous.