Evidence to the House of Lords Select Committee on Economic Affairs on Aspects of the Economics of Climate Change

Abstract

Dependence of damage estimates upon assumptions of economic growth and technological developmentGreater economic growth could, by increasing emissions, lead to greater damages from climate change. On the other hand, by increasing wealth and advancing technological development and human capital, economic growth would also increase a society's adaptive capacity and reduce those damages. Although analyses of the impacts (or damages) of climate change generally incorporate economic growth into the emissions and climate change scenarios that they use as inputs, these analyses do not adequately account for the increase in adaptive capacity resulting from that very growth. Because of this inconsistency, these analyses generally tend to overstate impacts.For instance, the average GDP per capita for developing countries in 2100 is projected to be $11,000 (in 1990 US$, at market exchange rates) under A2, the slowest economic growth scenario, and $66,500 under A1, the scenario with both the greatest economic growth ...