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The Economics of Climate Change A Case for Urgent Action Pavan Sukhdev Founder & Author, Corporation 2020 Study Leader, TEEB.

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Presentation on theme: "The Economics of Climate Change A Case for Urgent Action Pavan Sukhdev Founder & Author, Corporation 2020 Study Leader, TEEB."— Presentation transcript:

1 The Economics of Climate Change A Case for Urgent Action Pavan Sukhdev Founder & Author, Corporation 2020 Study Leader, TEEB UNEP Goodwill Ambassador Global Environment Facility Scientific and Technical Advisory Panel 20 March 2013

2 The Greatest Challenge Scientific Assessment for the GEF by STAP team: Climate change is “one of the single greatest challenges – perhaps the greatest challenge – facing humanity” (Nov 2012). “We have it in our hands to overcome these problems through sound policy, collaborative behaviour, a more far-sighted approach to the consequences of our action, and the processes of discovery about technology, organisation and policy.” –Sir Nicholas Stern, in foreword to Corporation 2020 “[W]hat we do in the next 10 or 20 years can have a profound effect on the climate in the second half of this century and in the next.” –Stern Review of the Economics of Climate Change

3 What will it cost? Stern Review (2006): “If we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more.” “In contrast, the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change [stabilizing between 500 and 550ppm CO2e] – can be limited to around 1% of global GDP each year.” Range is: –1% (net gains) to +3.5% of GDP In 2008, Stern revised his estimate up to 2% of global GDP. And earlier this year, he said that, in contrast to the 2006 report, which said that there is a 75% chance of 2-3 degree rise, he now believes we are “on track for something like four.” We already see 400,000 premature deaths/year from climate change, costing $1.2 trillion, or 1.6% of global GDP.

4 Summary: What will it cost? Stern: 2% of GDP = $1.4 trillion/year International Energy Agency: $38 trillion over 25 years World Economic Forum: $500 billion/year UNEP: $1.05 to $2.59 trillion/year to meet MDGs and IEA “Blue Map Scenario”. T-21 model scenario used = $1.3 trillion Reasonable estimate: $1.5 trillion/year

5 How much money is available? Millions of $. Cumulative since Pledged donations. Fund to Fund Transfers Excluded. Data from

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7 From Macro to Micro: Why the transition to a “Green Economy” needs evolution to “Corporation 2020” 2010 data. Source: U.S. Bureau of Economic Analysis

8 Micro-Policy Reforms to Make Business Deliver a Green Economy Source: “Why Corporation 2020?”, Island Press, 2012 Resource Taxation : Taxing the “bads” more & taxing the “goods” less Limiting Leverage : Introducing rules & limits to govern financial leverage Accountable Advertising : Making advertising responsible & accountable via norms & standards Disclosing Externalities : Measuring & disclosing all major corporate externalities (+ve & -ve) Read more at:

9 Thank You ! Pavan Sukhdev Founder & Author, Corporation 2020 Study Leader, TEEB UNEP Goodwill Ambassador


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