EEA welcomes the Stern review

The review, led by Sir Nicholas Stern former World Bank chief economist, estimates that the cost of climate change will be equivalent to losing at least 5 % of global gross national product (GDP) each year, if strong action is not taken. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20 % of GDP or more. The cost of reducing greenhouse gas emissions to avoid the worst impacts of climate change can be limited to around 1% of global GDP each year with effective, immediate action.

The EEA supports Stern’s view that action on climate change will not only cost but will also create significant business opportunities, as new markets are created in low-carbon energy technologies and other low-carbon goods and services.

The EEA also supports the Stern report views that:

• Three policy elements are required for an effective global response:
  

• An international consensus on long-term goals and a global framework for action is also needed. Such a framework should include: widespread emissions trading, more investment and cooperation in research and development, action to reduce deforestation and measures to support adaptation.
  

For further information please see the Stern review report at:
http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2006/press_stern_06.cfm

For additional information on climate change, energy and market-based instruments please see the following EEA reports:

• The European environment - State and outlook 2005
• Energy and environment in the EU (2006)
• Using the market for cost-effective environmental policy (2006) and Market based instruments for environmental policy in Europe (2006)