Climate Change Policy: What Do the Models Tell Us?

Abstract: Policy, business, finance and civil society stakeholders are increasingly looking to compare future emissions pathways across both their associated physical climate risks stemming from increasing temperatures and their transition climate risks stemming from the shift to a low-carbon economy. Here, we present an integrated framework to explore near-term (to 2030) transition risks and longer-term (to 2050) physical risks, globally and in specific regions, for a range of plausible greenhouse gas emissions and associated temperature pathways, spanning 1.5–4 °C levels of long-term warming. By 2050, physical risks deriving from major heatwaves, agricultural drought, heat stress and crop duration reductions depend greatly on the temperature pathway. By 2030, transition risks most sensitive to temperature pathways stem from economy-wide mitigation costs, carbon price increases, fossil fuel demand reductions and coal plant capacity reductions. Considering several pathways with a 2 °C target demonstrates that transition risks also depend on technological, policy and socio-economic factors. There is a balance in mitigation pathway design between economic transition cost and physical climate threats. This study provides a comprehensive framework to assess the near- and long-term risks under various warming scenarios globally and in particular regions.

TL;DR: The Stern Review as discussed by the authors is an independent, rigourous and comprehensive analysis of the economic aspects of this crucial issue, conducted by Sir Nicholas Stern, Head of the UK Government Economic Service, and a former Chief Economist of the World Bank.