Climate evidence - economic impacts22 April 2010
Why do we think climate change will damage the economy?
The British Government asked economist Sir Nicholas Stern to investigate the cost of tackling climate change.
His report in 2006 said that if we don't take action, climate change would wipe 5% off the world economy every year - and forever.
He added that if wider risks and impacts were taken into account, the damage could rise to 20% of GDP or more.
Stern said up to US$200 billion a year should be invested to avoid the worst effects.[i]
But just two years later Stern revised his view. He told the Independent newspaper that his report had "badly underestimated" the damages and risks.
He said: "This is about buying down risk. Starting now, that means it requires at least 1 per cent of world GDP. That is small relative to a planetary catastrophe." [ii]
We can't afford to ignore climate change. If the world doesn't act now, we will all be hit with much higher bills in the future.
Climate change threatens the basic elements of life for people around the world - access to water, food production, health, and use of land and the environment."
Sir Nicholas Stern
[i] HM Treasury, Stern Review on the Economics of Climate Change
© Getty
