Climate change will affect all aspects of our lives and economies. As summers get hotter and storms stronger, it will undermine our ability to grow food, to have secure homes, and produce sustainable incomes. At the same time, stopping climate change will also have consequences for society. Our ability to compare the costs and benefits of climate action is crucial to making sound global decisions.
Earlier this month, I led a team to complete a comprehensive economic assessment of climate risks for the United Kingdom. The UK is a leader in shifting its economy toward Net Zero, and has years of experience understanding the costs of shifting to green energy. But it has not had a corresponding cost number for the impacts it can expect. Particularly since the UK cannot direct the actions of the rest of the emitting world, this numbers are important to know.
The big challenge in producing an estimate like this corralling results from many other studies into a consistent framework. Across the studies that have tried to do this before (for the US and the EU), we were able to produce perhaps the most comprehensive assessment.
| FUND model | PESETA II-IV (2014-2020) | American Climate Prospectus (2015-2017) | Climate Impact Lab – DSCIM (2021-2022) | Temperature Binning Framework (2021) | CCRA3 Monetary valuation (2021) | UK Climate Costs Report (2022) | |
| Windstorm | ✔ | ✔ | |||||
| Wildfires | ✔ | ||||||
| Storms/floods | ✔ | ✔ | ✔ | ✔ | ✔ | ||
| Drought | ✔ | ✔ | ✔ | ||||
| Coastal/SLR | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| Crops | ✔ | ✔ | ✔ | ✔ | ✔ | ||
| Livestock | ✔ | ||||||
| Ecosystems | ✔ | ✔ | |||||
| Forestry | ✔ | ||||||
| Fisheries | ✔ | ✔ | |||||
| Mortality | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| Morbidity | ✔ | ✔ | |||||
| Energy | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |
| Labor | ✔ | ✔ | ✔ | ✔ | ✔ | ||
| Crime | ✔ | ||||||
| Recreation | ✔ | ||||||
| Trade Spillover | ✔ | ✔ | |||||
| Catastrophic | ✔ |
To jump to the conclusion, we find that the costs of unmitigated climate change (“current policies”) reach 7.4% of the UK’s GDP. And this is for one of the most un-vulnerable countries in the world. On the other hand, the costs for going to Net Zero are actually negative, once you account for the health co-benefits and the investment boost.
