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Green Blog posted a article in Global WarmingNew research shows that our existing economic models “grossly underestimate” the costs of climate change. As a result, current carbon prices are 10 to 20 times lower than they need to be to stop catastrophic climate change. The shocking (but somewhat not surprising) findings are presented in a new study by leading climate economist Nicholas Stern and co-author Simon Dietz, from the UK’s Grantham Research Institute. According to their research we need a globally coordinated carbon price of $32 to $103 per tonne of emissions, as early as next year. And within two decades the price need to almost triple and rise to $82-260 per tonne of carbon emissions. Current carbon prices are much, much lower than this. In the European Union, a tonne of carbon emissions costs €5.7 or about $7.7. In California a tonne of carbon emissions - despite having one of the world’s highest carbon price - only costs around $12. The report, which will be published in the Economic Journal, came to this conclusion after reviewing the DICE-model, a widely-used economic model developed by Yale Professor Bill Nordhaus in 1991. This model by Nordhaus has served as a basis for other major climate studies – such as the recent IPCC report. The problem though is that the DICE-model is based on data of the climate impacts we had knowledge about in the 90s. But nowadays, that data is old as we now know that the climate impacts are much worse than we previously expected. Unfortunately, the usage of this old model has led to a severe underestimation of the taxes and fees required. “It is extremely important to understand the severe limitations of standard economic models, such as those cited in the IPCC report, which have made assumptions that simply do not reflect current knowledge about climate change and its [...] impacts on the economy,” Stern said. The revised economic model by Stern and Dietz takes into account new and updated climate data. It also calculates that the ability to generate new wealth would be affected by climate change – due to climate impacts such as extreme weather, destruction of coastal and water infrastructure, and so on. “The new version of this standard economic model, for instance, suggests that the risks from climate change are bigger than portrayed by previous economic models and therefore strengthens the case for strong cuts in emissions of greenhouse gases,” Dietz said.
Simon Leufstedt posted a article in Green QuoteLord Nicholas Stern, British economist and academic who is most known for the Stern Review said, during an improvised speech at a Cape Town hotel in South Africa, that if we don't act quickly and determinedly to address climate change the world will face billions of climate refugees and extended world wars in a near future: "If the world's nations act responsibly, Stern said, they will achieve "zero-carbon" electricity production and zero-carbon road transport by 2050 _ by replacing coal power plants with wind, solar or other energy sources that emit no carbon dioxide, and fossil fuel-burning vehicles with cars running on electric or other "clean" energy. Then warming could be contained to a 2-degree-Celsius (3.4-degree-Fahrenheit) rise this century, he said. But if negotiators falter, if emissions reductions are not made soon and deep, the severe climate shifts and sea-level rises projected by scientists would be "disastrous." It would "transform where people can live," Stern said. "People would move on a massive scale. Hundreds of millions, probably billions of people would have to move if you talk about 4-, 5-, 6-degree increases" _ 7 to 10 degrees Fahrenheit. And that would mean extended global conflict, "because there's no way the world can handle that kind of population move in the time period in which it would take place.""