A Stern Warning

Last month, the British Treasury released the Stern Review on the Economics of Climate Change. Some findings:

• "The benefits of strong and early action far outweigh the economic costs of not acting." The annual cost of not acting will likely be 5% of global GDP and could reach 20%. In comparison, meaningful actions need only cost 1%.
• "The most vulnerable – the poorest countries and populations – will suffer earliest and most, even though they have contributed least to the causes of climate change."
• Stabilizing greenhouse gas levels below 550 parts per million of carbon dioxide equivalent (ppm CO2e) would alleviate most risks. Current atmospheric levels of greenhouse gases are at 430 ppm CO2e and are increasing by 2 ppm CO2e per year.

Governments around the world, especially the United States, must take action soon to avoid irreversible damage. A global framework like the Kyoto Protocol should be established. Cap-and-trade systems should be instituted; international carbon markets would be more effective, as they will allow third-world countries to develop while still limiting overall emissions. Countries should make a serious commitment to combat deforestation.

The Stern Review warns that economic disruption caused by global warming could be on the scale of that caused by the Great Depression or World War II. Whatever specific actions are taken, one thing is clear; those actions must be taken immediately.