PLEA Network

8 August 2023: Climate Home News: Mainstream economists accused of playing down climate threat. Economic models have ignored tipping points, rainfall changes and indoor work, leading them to under-estimate climate change’s economic damage. Mainstream economics has consistently understated the economic damage of climate change, according to two recent reports. As economic models fail to include tipping points, floods, droughts or indoor work, they hugely underplay the economic damage that global warming will do, the reports argue. The models are relied upon by investors, politicians, central bank governors and influential bodies like the Intergovernmental Panel on Climate Change (IPCC). An IPCC report last year, which was signed off by all governments, summarised these models to conclude that warming of around four degrees Celsius “may cause a 10-23% decline in global GDP by 2100 relative to global GDP without warming”. Other parts of the same report warned of catastrophic physical impacts at that level of warming. The professional body for the UK’s actuaries (IFA), whose job is to judge risk for insurance companies and pension funds, published a report last month which argued that influential economic models like this “jar with climate science”. Read more here