Home > Energy Issues > The Financial Cost of Climate Change

The Financial Cost of Climate Change

By: Kelly Fenn - Updated: 27 Dec 2012 | comments*Discuss
Climate Change Energy Uk Save Saving

A recent report by economist Nicholas Stern put the effects of climate change into hard monetary terms. The outcomes of the report were an eye opening indication of what the cost to the environment could be if we act now or what will happen if we don’t change out ways.

Understanding how environmental costs equate to what we’ll have to pay as a nation, and as individuals, helps demonstrate the need for changing our lifestyles even more strongly.

The Hard Facts

According to the Stern Review: “The scientific evidence is now overwhelming: climate change presents very serious global risks, and it demands an urgent global response.” The report calls for action to tackle climate change now rather than later. In particular, a rise in global temperatures, melting glaciers, flooding, extreme weather and extinction were cited as among the principle effects of climate change.

Rise in Global Temperatures

Stern argues that if we don’t reduce carbon emissions, there is a 75% possibility of temperatures rising over the next 50 years by two to three degrees and a 50% chance of an increase of five degrees. That might not sound like much, but the effects on the world ecosystem could be devastating.

Extreme Weather Conditions

As the glaciers melt, more adverse and extreme weather conditions will become more regular. And Stern wasn’t just referring to a few heat waves here in the UK. According to Friends of the Earth, floods in Mozambique, forest fires in Indonesia, hurricanes in Florida and storms in the UK would all be commonplace. Increases in temperature will mean that drought will be more widespread, and agriculture and crop yields- particularly in the third world- will be seriously damaged.

That said, flooding too will also be on the up. Rising sea levels will impact the risk of floods in coastal areas, including global cities such as London and New York. Stern suggests that 200 million people could be permanently displaced as a result of losing their homes from flooding. This could put an increased pressure on the available land left, particularly as global populations continue to rise.

Species of wildlife would also suffer at the hands of the changing environment. According to Stern, up to 40% of species face extinction if nothing is done to combat climate change.

How Much Acting Now Will Cost

Stern estimates that it would cost one per cent of the UK’s Gross Domestic Product (GDP) to stabilise current emissions over the next 20 years and reduce by up to three per cent thereafter.

How Much Doing Nothing Will Cost

In the worst case scenario, the global economy could shrink by a massive 20% as a direct result of the massive effects of climate change over the next century. Extreme weather conditions alone would reduce global GDP by one per cent. And depending on by how much global temperatures rise by, global output could reduce by up to 10%.

For all these reasons, now rather than later is the time to act. Many environmental groups have called for the government to set stricter targets than the 20% cut in CO2 pollution by 2010 the UK has already committed to. As a result of the Stern Report’s findings, the government have committed to working with the World Bank to fund projects to fight climate change worldwide, and to set bigger emissions targets by 2030.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

(never shown)
(never shown)
(never shown)
(never shown)
Enter word:
Latest Comments
  • Zal
    Re: Getting Grants From Your Council
    Hi I'm on a low income under £800 before deductions a month. A single occupant homeowner with no dependant…
    24 October 2020
  • Ga131078
    Re: Getting Grants From Your Council
    Hi is there anyway of getting grants for doors and windows as I am classed as being disabled as my double glazed windows and…
    23 October 2020
    Re: Getting Grants From Your Council
    21 October 2020
  • Babs
    Re: Getting Grants From Your Council
    My double glazed windows are 29 years old. They no longer do what they are meant to full of drafts and condensation between…
    21 October 2020
  • oxoman
    Re: Getting Grants From Your Council
    My Double glazing is now over 25 years old and the glazed units are misting up, I would think they have lost their insulating…
    15 October 2020
  • Sobia
    Re: Getting Grants From Your Council
    My windows are old all drought comes in home does not stay warm for long I’ve got 3 children younger 1 is 6 am I entitled to…
    12 October 2020
  • Carter
    Re: Getting Grants From Your Council
    My window are old and they leak I’m disable and my home is so draughty and damp though the windows
    9 October 2020
  • buddyboy
    Re: Getting Grants From Your Council
    I am ninety and my wife is 85 . I suffer with diabetes and my wife has emphysema. The windows are very draughty, some window…
    6 October 2020
  • Shaky
    Re: Getting Grants From Your Council
    Hi I am I need of new windows as the ones I got are old and really no good can I get a grant for this and if so where do I apply
    5 October 2020
  • D.T
    Re: Getting Grants From Your Council
    Hi my double glazing has failed, i have been told my windows mist up like there is dump in between the glass, also i have…
    5 October 2020