Nicholas Stern, one of the world’s most influential economists, has come out with a new report showing that the future costs of climate change have been incredibly underestimated.
The report, Endogenous growth, convexity of damages and climate risk, indicates it is even more important than previously thought that politicians quickly and aggressively stop unchecked climate change caused by man-made carbon dioxide emissions.
Stern, a professor at the Grantham Institute at the London School of Economics, and his co-author Simon Dietz found that the current economic models used to calculate the cost of climate change are vastly inadequate and need to be updated so that proper decisions can be made about risks associated with global warming.
They said that even the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) has cited the existing economic models and, as a result, has arrived at severely limited assumptions about the costs of global warming.
“It is extremely important to understand the severe limitations of standard economic models, such as those cited in the IPCC report, which have made assumptions that simply do not reflect current knowledge about climate change and its potential impacts on the economy,” Stern, a former chief economist with the World Bank, said in a media release.