The Stern Review

The stern review delves into a lot of the same points we have covered in class thus far. What I got out of it is how the economy and climate are intertwined. There are many different ways that countries affect the atmosphere, whether they are developed or not. But, the biggest thing that shown through all the stats and quotes, is that our global emissions need to be reduced while also not bringing down economic growth. So those two things need to coexist equally in our world. Developing countries are causing just as much emission as developed countries because of the massive draw on power industries, like China and India, have. There are three perspectives at work with the increasing emissions and what the effects are: the first is the physical impact that emissions has on our economy such as on human life and on the environment; the second is using economic models, such as integrated assessment, to discern how the transition to low carbon will affect the economy as a whole; the third perspective is comparing the costs of an additional unit of carbon compared to the effects associated with incremental reductions in carbon. There are many effects that we will see will a changing climate, both good and bad. Obviously the physical effect of global warming is that what we have been learning all along, like growth of crops and the melting of glaciers. Crops yields are said to actually increase with moderate temperature increases but will decline with greater amounts of warming which is what we are heading for. One-sixth of the world’s population will be affected by glaciers melting either by increased flooding or in reduction of water supply. The other effect that this global warming has on the environment is on the animals that live within it. Around 15-40% of species potentially face extinction after only mild global warming. As long as we continue with a “Business as usual” scenario, or BAU, we will at least a 50% risk of exceeding a 5 degree Celsius increase globally. This will transform the geography of the world dramatically, or even throw us into a new ice age. The other effect that companies will see is an estimated 1% of global GDP cost if the PPM of carbon stabilizes at 550.
This affects us as managers on a human level, as well as on an economic level. We have to find a middle ground between economic growth and carbon reduction. Both are equally