Stern Review: The economics of climate change

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Stern Review The economics of climate change
Environmental Economics

• Ákos Lukács
• Ph.D. student
• Szent István University, Gödöllo
• Research Group of Biomass Economics

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Environmental Economics subject

• Lessons Tuesdays 14.00, Professor room
• Exam preparing an assignment oral exam
• Assignment topic-list will be available at the
  www.fogarassy.hu
• Contact for questions and assignment check
  lukacs.akos_at_gtk.szie.hu
• Areas of study
• Economics of Natural Resources, Economics of
  climate change, Climate policies, Renewable
  energy, Emissions Trading, Kyoto Protocoll

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What is climate change?

• Average temperature rise of 2-4 Celsius
• High level of CO2, 450-500 ppm in the atmosphere
• Risks
• Ecosystems cannot adopt
• Safe food supply harmed
• Sustainable economic growth cannot be maintained
• Goal to stabilise the level of CO2 (all
  Greenhouse gases quantified in CO2e)
• How?...

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The beginning of the research

• Research started in July 2005. ended in autumn
  2006. sponsored by the HM Treasury, UK
• Project leader Sir Nicholas Stern
• Based on the 3rd Assessment Report of the IPCC
• Objectives
• To research the economic background of reaching a
  low GHG economy (mitigation)
• Investigate the potential of how to adapt to
  climate change (adaptation)
• Specific conclusions for the UK

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IPCC (Intergovernmental Panel on Climate Change)

• Based in 1988
• Established by the WMO World Meteorological
  Organisation and the UNEP United Nations
  Environmental Programme
• Objectives
• Assuring scientific, professional, societical and
  economical information to have a real picture
  about risks, effects and possible adaptation of
  human caused climate change
• Divisions Working Group I-II-III and the Task
  Force
• Peace Nobel-price (2007)

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Table of contents of the Review

• Chapters
• I. Climate change our approach
• II. Impact of climate change on growth and
  development
• III. The economics of stabilisation
• IV. Policy responses for mitigation
• V. Policy responses for adaptation
• VI. International collective action
• The basic thought of the review
• To prove with economical tools, that the benefits
  of acting on time against the climate change is
  bigger, than their costs, and to investigate
  these best methods.

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Main findings of the review

• Climate change is a globals risk, it needs a
  global answer (UNFCCC, Kyoto, place of reduction)
• Until 2050, the costs of adaptation and
  mitigation methods is 1 of global GDP
• Mechanisms needed internationally
• Emissions trading (Price on carbon)
• Clean new technologies and cooperation
• Action to reduce deforestration (transportation)
• Adaptation (policy, information, new crops)
• Educating people on energy efficiency (multilevel)

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HomeworkPlaying a Game

• I. Short summary of the Stern Report
  http//www.hm-treasury.gov.uk/media/9/9/CLOSED_SHO
  RT_executive_summary.pdf
• II. The Climate Challenge game of the BBC
• Available at
• http//www.bbc.co.uk/sn/hottopics/climatechange/

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Sources to read

• Stern Review www.hm-treasury.gov.uk
• United Nations Framework Convention on Climate
  Change www.unfccc.int
• Intergovernmental Panel on Climate Change
  www.ipcc.ch
• European Union Policy on Climate Change and the
  Emissions Trading Scheme http//ec.europa.eu/envir
  onment/climat/home_en.htm
• Dr. Fogarassy Csaba www.fogarassy.hu

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Thank you for your attention !
lukacs.akos_at_gtk.szie.hu