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Did the Stern Review underestimate US and global climate damages?

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  • Ackerman, Frank
  • Stanton, Elizabeth A.
  • Hope, Chris
  • Alberth, Stephane

Abstract

The Stern Review received widespread attention for its innovative approach to the economics of climate change when it appeared in 2006, and generated controversies that have continued to this day. One key controversy concerns the magnitude of the expected impacts of climate change. Stern's estimates, based on results from the PAGE2002 model, sounded substantially greater than those produced by many other models, leading several critics to suggest that Stern had inflated his damage figures. We reached the opposite conclusion in a recent application of PAGE2002 in a study of the costs to the US economy of inaction on climate change. This article describes our revisions to the PAGE estimates, and explains our conclusion that the model runs used in the Stern Review may well underestimate US and global damages. Stern's estimates from PAGE2002 implied that mean business-as-usual damages in 2100 would represent just 0.4 percent of GDP for the United States and 2.2 percent of GDP for the world. Our revisions and reinterpretation of the PAGE model imply that climate damages in 2100 could reach 2.6 percent of GDP for the United States and 10.8 percent for the world.

Suggested Citation

  • Ackerman, Frank & Stanton, Elizabeth A. & Hope, Chris & Alberth, Stephane, 2009. "Did the Stern Review underestimate US and global climate damages?," Energy Policy, Elsevier, vol. 37(7), pages 2717-2721, July.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:7:p:2717-2721
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    References listed on IDEAS

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    1. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801.
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    2. R. Warren & C. Hope & D. E. H. J. Gernaat & D. P. Vuuren & K. Jenkins, 2021. "Global and regional aggregate damages associated with global warming of 1.5 to 4 °C above pre-industrial levels," Climatic Change, Springer, vol. 168(3), pages 1-15, October.
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    8. Chris Hope, 2013. "Critical issues for the calculation of the social cost of CO 2 : why the estimates from PAGE09 are higher than those from PAGE2002," Climatic Change, Springer, vol. 117(3), pages 531-543, April.
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