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COP21: researchers must radically improve economic models of climate change costs
“Current economic models tend to underestimate seriously both the potential impacts of dangerous climate change and the wider benefits of a transition to low-carbon growth. There is an urgent need for a new generation of models that give a more accurate picture,.Existing models fail to account for tipping points and catastrophic repercussions – such as rising sea levels and permafrost thawing – when estimating climate costs,” stated the renowned environmental economist Lord Stern, Chair of the Grantham Research Institute on Climate Change and the Environment.
Writing in the journal ‘Nature’ Stern says that the hard-to-predict impacts that are the most troubling potential consequences of inaction.
Policy makers have been left misguided by these models which suggest that fossil fuels can be consumed in greater quantities without any negative consequences to economic growth.
According to Stern the COP21 Paris Agreement could be nullified unless ‘incremental improvements’ to economic models are introduced.
Stern calls on new models to be introduced which highlight the ‘damage functions’ of economic losses in relation to climate change. These include dynamic stochastic computable general equilibrium (DSGE) models to account for future uncertainties and agent-based models (ABMs), which are widely used in the finance sector.
“There is huge potential in future technologies that can drive change. These are omitted or badly underestimated in our current climate modelling — deeply damaging to our guidance for policy-making. The well-being and prosperity of future generations are worth more,” he asserts.
One Planet Summit: Financial majors and the World Bank get behind climate challenge
Two years on from COP21 and the historic Paris Agreement, France President, Emmanuel Macron, Jim Yong Kim President of the World Bank Group, and António Guterres Secretary-General of the United Nations, brought together leading international players…
CCC funded research develops open source tool to promote low carbon construction supply chains
The CCC has funded an innovative project, CCIT, to enable construction contractors to manage their supply chains so as to minimise carbon use. The CITT project has brought together Costain, Skanska and the University of Edinburgh Business…
How the new PAS2080 standard is promoting low carbon construction
The London Seminar on 14 November on “Implementing PAS2080: Supply Chain Collaboration to reduce the Carbon Footprint and Cost of major Infrastructure Projects’ brought together leading experts and the supply chains of major infrastructure clients and contractors to…
EEA: industry across Europe responsible for over half of key pollutants in air
Industry across Europe is responsible for more than half of all carbon dioxide, particulate matter and other key pollutants emitted into the air, according to updated industrial pollution country profiles published today by the European Environment…