Economical Damage = Unknown Factor.

The uncertainty in calculations and predictions of the economical impact caused by the Global Environmental Change is high. Of course no one knows what will or might happen, but there are some publications out there about this topic.

In this post I will take a look at a report by the German Institute of Economic Research and the Stern Review on the Economics of Climate Change (published by Nicholas Stern for the British government) to give examples for estimated impacts.

After a look at these two reports I will also talk about the views of Richard Tol. Richard Tol is an economist who criticized especially the Stern Review on the Economics of Climate Change.

The German Institute of Economic Research published this paper in 2005. In this paper it is estimated  that damages up to 200 billion US-Dollars could be caused until 2050 if no programs are introduced to reduce the global greenhouse gas emissions immediately.

In the Stern Review on the Economics of Climate Change (Link) it is estimated that currently and in the future total costs and risks are about 5% of the world gross national product. But this figure could go up to about 20%.

Richard Tol criticizes especially the numbers given by the Stern Review (Link). He claims that for this report only the worst scenario cases were used. Tol also criticizes that the Stern Report is based on a stagnating economical growth in especially african countries, which he expects to be grow until 2100.

As stated above: No one knows what will happen... What do you think about these views?