Logo Trop1 (1)

Stern Review: The Economics of Climate Change Part 2


A reading from the ‘Stern Review: The Economics of Climate Change’ by economist Nicholas Stern for the Government of the United Kingdom which contains predictions on mortality, ecosystems and income levels. This reading includes results of their modelling that states that climate change will cause an average of 5% reduction in the global per capita consumption over the next 2 centuries, with an addition of 145 – 220 million people falling below poverty line in South Asian and sub-Saharan Africa by 2100, and an expected increase in child mortality to 165,000 – 250,000 children per year. The reading is subdivided into four chapters, as follows:

  1. How climate change will affect people around the world: This chapter draws correlations between climate change and potential implications for access to food, water stress, health and well-being, land and the environment. It gives a detailed analysis of global warming implications from 1ºC rise up to temperature change of 5ºC and above. [pp 55 – 91 (as per table of contents) or pp 100 – 136 (as per scrolling)]
  2. Implications of climate change for development: This chapter looks at developing countries and their vulnerability to climate change due to their dependence on climate sensitive sectors such as agriculture. Apart from food insecurity and damage to the healthcare systems, there will be mass migrations and conflict which will hamper growth and development. [pp 92 – 121 (as per table of contents) or pp 137 – 166 (as per scrolling)]
  3. Costs of climate change in developed countries: This chapter looks at the impacts of climate change on the developed countries and explains how for moderate amounts of warming some higher latitude countries will face short-term benefits due to rise in agriculture yields, lower winter mortality, lower heating requirements and possible boosts in tourism. However, they will face disastrous impacts due to climate shocks at higher temperatures. [pp 122 – 142 (as per table of contents) or pp 167 – 187 (as per scrolling)]
  4. Economic modelling of climate change impacts: This chapter details the modelling work conducted for estimating the monetary impact of climate change by using an Integrated Assessment Model with a temperature rise of 2-3ºC as the starting point. [pp 143 – 167 (as per table of contents) or pp 188 – 212 (as per scrolling)]

Students will learn how melting glaciers, crop yield decline, ocean acidification, displacement, malnutrition, rising sea levels and species extinction will impact the global economy through empirical analysis. They will also learn what makes developing countries most vulnerable to climate change. They will understand how certain adverse effects of climate change are already underway and early mitigation may be the only way to control the impacts.

Use this tool to help your students find answers to:

  1. How will a 2ºC temperature rise scenario differ from a 4ºC temperature rise scenario?
  2. Discuss climate vulnerabilities of:
    1. Developed Countries
    2. Developing Countries
  1. Define and explain the ‘Mendelsohn’ model, the ‘Tol’ model, and the ‘Nordhaus’ model.
About Tool
Tool NamePart II: The Impacts of climate change on growth and development from Stern Review: The Economics of Climate Change
Topic(s) in DisciplineClimate Change Economics, Stern Review, Macroeconomics, Microeconomics, Economic Growth, International Economics, Econometrics, Integrated Assessment Model, Per Capita Consumption, GDP
Climate TopicPolicy, Politics and Environmental Governance, Climate Economics
Type of toolReading (pp 55 to 167 ) – as per table of content; (pp 100 – 212) – as per
Grade LevelUndergraduate, Graduate
Translation     –
Developed byNicholas Stern
Hosted atGrupo de Pesquisa em Mudancas Climaticas (GPMC), Brazil
Computer SkillsBasic


To Subscribe to our newsletter please enter