A new academic paper by Nicholas Stern and Simon Dietz critques the widely-used Dynamic Integrated model of Climate and the Economy (DICE), developed by William Nordhaus in the 1990’s, and updated in 2013. In a summary from the London School of Economics, Lord Stern states: “I hope our paper will prompt other economists to strive for much better models which will help policy-makers and the public to recognise the immensity of the potential risks of unmanaged climate change.” By modifying assumptions – for example, using a range of temperatures from 1.5C to 6C for climate senstivity, rather than the single 3C level of the DICE model – Stern and Dietz arrive at a level of $200 per tonne for the cost of carbon – astonishingly higher than $40 – $50 per tonne cost that the DICE model would produce. (The carbon tax in British Columbia grew from $10 per tonne at its inception in 2008, to the current level of $30 per tonne of CO2, since July 2012. )
London School of Economics press release is at http://www.lse.ac.uk/GranthamInstitute/news/dietz_stern_june2014/ . A working paper version of the article , Stern and Dietz (2014) Endogenous growth, convexity of damages and climate risk: how Nordhaus’ framework supports deep cuts in carbon emissions, is available from a link at http://www.lse.ac.uk/GranthamInstitute/publication/endogenous-growth-convexity-of-damages-and-climate-risk-how-nordhaus-framework-supports-deep-cuts-in-carbon-emission/.
“We’re massively underestimating climate costs, experts warn” (June 16) at Grist at http://grist.org/news/were-massively-underestimating-climate-costs-experts-warn/
A February report surveys the development of climate change and energy legislation in 66 countries which account for 88% of the world’s emissions. The survey, co-authored by the Global Legislators Organisation (GLOBE) and the Grantham Research Institute at the London School of Economics, finds that 62 of the 66 countries have passed, or are in the process of passing, significant legislation; the countries lagging are Venezuela, the United Arab Emirates, Saudi Arabia and Canada. China and Mexico are held up as examples of progress; Japan and Australia are judged to have regressed.
See the 700-page GLOBE Climate Legislation Study: A Review of Climate Change Legislation in 66 Countries (4th edition) at: http://www.lse.ac.uk/GranthamInstitute/publications/Policy/docs/Globe2014.pdf; the GLOBE website is at: http://www.globeinternational.org/. And, for a further review of Canadian policy initiatives, see Regulating Carbon Emissions in Canada: Climate Policy Year in Review and Trends, 2013 at: http://www.iisd.org/pdf/2014/canadian_carbon_policy_review_2013.pdf. This annual review by the International Institute on Sustainable Development was released in February 2014, summarizing landmark policy initiatives and predicting issues to watch in 2014. For the coming year, it emphasizes the importance of provincial action, in the absence of central, federal leadership.