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ClimateXChange :: International assessments of the economic impacts of climate change

International assessments of the economic impacts of climate change

Author: William Blyth, Oxford Energy Associates Karen Turner and Oluwafisayo Alabi, Strathclyde University and Robert Gross, Imperial College

Released: January 2018

The Scottish Government is considering introducing a new Climate Change Bill, which will amend the existing Climate Change Act (Scotland) 2009 to strengthen the emissions reduction target for 2050 in line with the 2015 Paris Agreement objectives to pursue efforts to limit warming to 1.5°C

ClimateXChange, on behalf of the Scottish Government, has commissioned this Rapid Evidence Assessment (REA) and synthesis of key global assessments of the costs and benefits of climate change action in order to give context to Scottish Government’s decisions and as a basis for continuing policy development.

The study focuses on literature that has emerged since the Stern Review of the Economics of Climate Change (Stern 2007), and seeks to build upon previous review exercises.

A key message arising from this review is that estimates of climate impacts are inherently uncertain, so that climate policy needs to be assessed in terms of risk management, rather than straight-forward cost-benefit analysis.

The balance of evidence suggests that although the mid-point estimates of abatement cost may be higher than the mid-point damage estimates, it is reasonable to conclude that there is a considerable risk of much higher-than-expected damages which would justify the cost of ambitious abatement action. This is in line with the conclusion arising from climate risk literature suggesting that reducing the risk of exceeding tipping points is a key reason to aim for strong abatement targets globally.

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