E3G

Investing in the economics of climate security

By Nick Mabey

The economics of climate change is lagging behind the science. We need to improve on this quickly if we are to take the right investment decisions.

So argues Nick Mabey in this E3G opinion article. A pdf download version is also published here.

Investing in the Economics of Climate Security

Earlier this year, the Intergovernmental Panel on Climate Change (IPCC) issued its Fourth Assessment Report on the technology and economics of mitigating climate change.

Media reporting at the time focused on the now familiar message that the technology needed to stabilise greenhouse gases in the atmosphere already exists, and that reducing emissions will cost only a fraction of global GDP.

But this interpretation of the IPCC report hides a more important analytical debate, one that goes to the heart of the economics of climate change: how far and fast should we cut global greenhouse emissions to effectively ensure climate security?

The 2 central components of this debate are easy to identify, for there is currently a mismatch between them.

Firstly, there are the high profile calls from climate scientists for urgent and strong mitigation action so that we can avoid extreme climate change.

Secondly, and in contrast, are the weak mitigation scenarios analysed by the majority of economic studies reviewed by the IPPC.

Let’s look at each of these aspects in turn.