Economic models significantly underestimate climate change risks

Economic models significantly underestimate climate change risks

Date:
June 3, 2018
Source:
London School of Economics
Summary:
Policymakers are being misinformed by the results of economic models that underestimate the future risks of climate change impacts, according to a new article.

Policymakers are being misinformed by the results of economic models that underestimate the future risks of climate change impacts, according to a new journal paper by authors in the United States and the United Kingdom, which is published today (4 June 2018).

The paper in the Review of Environmental Economics and Policy calls for the Intergovernmental Panel on Climate Change (IPCC) to improve how it analyses the results of economic modelling as it prepares its Sixth Assessment Report, due to be published in 2021 and 2022.

The paper’s authors, Thomas Stoerk of the Environmental Defense Fund, Gernot Wagner of the Harvard University Center for the Environment and Bob Ward of the ESRC Centre for Climate Change Economics and Policy at the London School of Economics and Political Science, draw attention to “mounting evidence that current economic models of the aggregate global impacts of climate change are inadequate in their treatment of uncertainty and grossly underestimate potential future risks.”

They warn that the “integrated assessment models” used by economists “largely ignore the potential for ‘tipping points’ beyond which impacts accelerate, become unstoppable, or become irreversible.” As a result “they inadequately account for the potential damages from climate change, especially at moderate to high levels of warming,” due to rises in global mean temperature of more than 2 Celsius degrees.

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