An international group of researchers is today warning that policymakers have been receiving economic assessments of future climate change impacts which omit the biggest risks.

The researchers on science, economics and policy from the United States, Germany and the United Kingdom are publishing a joint report identifying major risks that are being documented by scientists, but excluded or downplayed by economists.

The report has been produced by the Earth Institute at Columbia University, the Potsdam Institute for Climate Impact Research and the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science.

Economic assessments of potential future risks omit or grossly underestimate many of most serious consequences

The authors, which include Professor Lord Nicholas Stern, Professor Sir Alex Halliday, Professor Johan Rockström, Professor Ottmar Edenhofer and Professor Hans Joachim Schellnhuber, state:

“Economic assessments of the potential future risks of climate change have been omitting or grossly underestimating many of the most serious consequences for lives and livelihoods because these risks are difficult to quantify precisely and lie outside of human experience.”

“Scientists are growing in confidence about the evidence for the largest potential impacts of climate change and the rising probability that major thresholds in the Earth’s climate system will be breached as global mean surface temperature rises, particularly if warming exceeds 2°C above pre-industrial level.”

It is estimated that the last time that the carbon dioxide concentration was at today’s level was about 3 million years ago during the Pliocene Epoch, when compared with today the global climate was at least 3°C warmer, the polar ice caps were much smaller and global sea level was 10 to 20 metres higher. 

The report says:

“Modern humans first appeared on Earth less than 250,000 years ago. As a species, therefore, we have no experience of a climate as warm as the Pliocene’s, towards which we are currently heading.”……

“It should be noted that the aggregate global greenhouse gas emissions expected in 2030 if all countries implement the pledges for emissions contained in their nationally determined contributions to the Paris Agreement would be consistent with a pathway that results in a global mean surface temperature that is about 3°C higher by 2100 than its preindustrial level, with further warming in the 22nd century.”

“Thresholds in the climate system and/or thresholds in the capacity for human societies to adapt to the impacts of climate change …may mean that impacts become irreversible, unstoppable or accelerate. Many of these risks cannot be extrapolated from the climate of the recent past and lie outside the experience of modern humans.”

The impacts highlighted in the report include:

• destabilisation of ice sheets and glaciers and consequent sea level rise;
• stronger tropical cyclones;
• extreme heat impacts;
• more frequent and intense floods and droughts;
• disruptions to oceanic and atmospheric circulation; and
• destruction of biodiversity and collapse of ecosystems.

The report warns:

“Some of these impacts involve thresholds in the climate system beyond which major impacts accelerate, or become irreversible and unstoppable. When a threshold is breached, it might cause one or more other thresholds to be exceeded as well, leading to a cascade of impacts.”...

“Many of these impacts could exceed the capacity of human populations to adapt, and would significantly affect and disrupt the lives and livelihoods of hundreds of millions, if not billions, of people worldwide."

“Potential for large concurrent impacts across world would cause mass migration, displacement and conflict, with huge loss of life”

The report highlights shortcomings in recent advice to governments that has omitted these impacts:

“Economic assessments fail to take account of the potential for large concurrent impacts across the world that would cause mass migration, displacement and conflict, with huge loss of life.

“Economic assessments that are expressed solely in terms of effects on output (e.g. gross domestic product), or that only extrapolate from past experience, or that use inappropriate discounting, do not provide a clear indication of the potential risks to lives and livelihoods.”

However, the report also acknowledges some recent progress by researchers on the economic risks of climate change:

“Some advances are being made in improving economic assessments of climate change impacts but much more progress is required if assessments are to offer reliable guidance for political and business leaders on the biggest risks.”

It concludes:

“The lack of firm quantifications is not a reason to ignore these risks, and when the missing risks are taken into account, the case for strong and urgent action to reduce greenhouse gas emissions becomes even more compelling.”

Click here to download The missing economic risks in assessments of climate change impacts