Global Warming
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Abstract
• The consequences of climate change are serious, more so for developing countries than for developed ones. Indeed for some time to come climate change may well have benefits in the more temperate zones, where most of the wealthier countries lie. • The causes of climate change are to be found in the increased emissions of greenhouse gases (GHGs). Reductions in these gases will also reduce likely climatic impacts but mitigation will be expensive and the likely benefits may be small compared to the costs, when the latter are measured using conventional discount rates of 4-5 percent in real terms. • The benefits of action are enhanced when measures to reduce GHGs are accompanied by support for R&D in low carbon technologies and when action is taken to adapt to climate change, especially by investing in measures to reduce the health impacts of such change. • The ratio of benefits to costs rises further if mitigation policy is ‘flexible’, so that reductions are made when they are most effective. • The same ratio rises a great deal more if we take account of uncertainty, where this uncertainty is measured in terms of the climate sensitivity parameter and the benefits are still measured in terms of expectations – i.e. no account is taken of risk aversion.