The paper "Economics of Climate Change" is a wonderful example of an assignment on macro and microeconomics. On the economics of stabilizing greenhouse gases, the Stern Review notes that if early actions are taken on climate change, the benefits will outweigh costs. There is overwhelming scientific evidence showing that the increased risks can be irreversible taking into account that many of the world’ s entities would like to continue with business-as-usual paths for the emission of gases. The report mentions that currently, the stock of greenhouse gases is about 430 ppm, which is almost double, compared to the 280 ppm before Europe started industrializing.
This has considerably caused the world to warm, causing severe effects such as flooding, which can be avoided as per the proposal (Godard, 2008; Ward, 2012)The proposal also indicates that climatic changes can hinder the basic requirements of life, for instance, food, water, health and the environment in general. Taking into account that the climatic effects will not be equally distributed, the poorest nations will suffer the most, if the situation cannot be changed now Weyant, J.P. (2008), Apart from being geographically disadvantaged by being in warmer regions and suffering from high rainfall variability, they lack resources to mitigate adverse climatic effects.
However, the economists also argue that even though climate changes may have a small positive impact on the developed nation in earlier stages, especially those in high latitudes such as Russia, Canada, and Scandinavia by benefiting from increased tourism and agricultural yield due to increased temperatures, they will experience damaging infrastructures, rapid warming rates, and deteriorating local livelihoods, human health, and biodiversity (Stern Review, 2006). By using integrated assessment models, the paper strives to estimate the total impacts of climate change on the economy, which Stern suggests to be higher than those of previous researches.
This involves modeling the overall impact of climatic changes in monetary terms so that they can be quantified. Although previous research had considered 2-3 degrees Celsius as the trend, that may be exceeded at the end of this century; this study used 5-6 degrees Celsius noting that nations are likely to incur excess costs of 10% on their GDPs (Stern Review, 2006).
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Godard, O. (2008).The Stern Review on the Economics of Climate Change: contents, insights
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Nordhaus, W.D. (2007). A review of the stern review on the economics of climate change.
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Stern, N. (2007).The Economics of Climate Change. Cambridge: Cambridge University Press.
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worse'. The Guardian. Retrieved on 27 September 2014 from http://www.theguardian.com/environment/2013/jan/27/nicholas-stern-climate-change-davos
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Weyant, J.P. (2008). A critique of the stern review's mitigation cost analyses and integrated
assessment. Review of Environmental Economics and Policy, 2 (1). pp.77-93.