Cost?benefit Analyses of Climate Change

The United Nations Environment Programme (UNEP) estimated that the world would need to reduce greenhouse gas (GHG) emissions by 50?60 per cent from 1990 levels by 2050, with a future downward trajectory that is even more drastic, to have a probable chance of limiting a global temperature increase to 2oC. It was also estimated that a 2oC warming could lead to overall global losses of about 1 per cent of the world?s gross domestic product (GDP). Models predict however that losses will be distributed in an unbalanced way. While countries in Africa and South Asia may experience losses of around 4?5 per cent of their GDP, models predict minimal short term GDP losses in rich countries (Nordhaus, 2007; Stern, 2007). (?)