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.