Reading: The Stern Review on the Economics of Climate Change Part 1

A reading from the ‘Stern Review: The Economics of Climate Change’ by economist Nicholas Stern for the Government of the United Kingdom which contains a compilation of the scientific evidence of human caused climate change, its analysis through economic theory, and discussion on possible alternatives for development. The reading is subdivided into three chapters, as follows:

  1. The Science of Climate Change: This chapter provides scientific evidence to link the increase in greenhouse gases to climate change along with its impact at the regional and global level. [pp 1 – 22 (as per table of contents) or pp 46 – 67 (as per scrolling)]
  2. Economics, Ethics and Climate Change: This chapter discusses the externalities and the cost-benefit analysis of climate change. It focuses on the risks and uncertainty it may pose to free markets, economic policies, welfare, equity, justice, freedoms and rights. [pp 23 – 40 (as per table of contents) or pp 68 – 85 (as per scrolling)]
  3. Ethical Frameworks and Intertemporal Equity:​​ This chapter looks at the relevance of some technical frameworks such as – intertemporal appraisal, cost-benefit analysis, and discounting, in tackling various challenges posed by climate change. [pp 41 – 54 (as per table of contents) or pp 86 – 99 (as per scrolling)]

Students will learn how to analyse climate change through the lens of economics. They will also learn about the economic activities that have contributed most to greenhouse gas emissions and the possible policy challenges that may arise from it.

Use this tool to help your students find answers to:

  1. How does an increase in the concentration of greenhouse gases cause global warming?
  2. State some of the economic risks and uncertainties caused due to a rise in greenhouse gas emissions?
  3. What is discounting? How is this method used to calculate the economic risks in the Stern Review?

About the Tool

Tool NamePart I: Climate Change: Our Approach from Stern Review: The Economics of Climate Change 
Topic(s) in DisciplineEconomics of Climate Change, Greenhouse Gas Emissions, Economic Risk, Economic Policy, Cost-Benefit analysis, Discounting, Uncertainty
Climate TopicEnergy, Economics and Climate Change
Type of toolReading (pp 1 to 54 ) –  as per table of contents; (pp 46 – 99) – as per scrolling
Grade LevelHighschool, Undergraduate
Developed byNicholas Stern
Hosted atGrupo de Pesquisa em Mudancas Climaticas (GPMC), Brazil
Computer SkillsBasic