New U.K. Report Says Climate Change Will Hurt Economy

Sir Nicholas Stern, left, Head of the Government Economics Service and Adviser to the Government on the economics of climate change and development, has presented his report on the Economics of Climate Change. The report examines the latest scientific evidence on climate change and how economic theory can help us analyse the relationship between climate change and the divergent paths for growth and development that will result from ‘business as usual’ approaches and from strong action to reduce emissions.

It explains the technical foundations necessary for the economics that the scientific analysis dictates. It addresses the complex issues involved in the comparison of alternative paths and their implications for individuals in different places and generations. It addresses ethical issues concerning the aggregation of the welfare of individuals across time, place and uncertain outcomes. Finally, it provides a technical explanation of the approach to discounting used throughout the Review and an analysis of the costs of climate-change impacts.