There is no cost-free way to tackle climate change. But the costs of inaction are far greater than the costs of action. The Treasury modelling confirms that the world can reduce emissions at a modest cost.
The world can take medium action (consistent with current pledges) or more ambitious action (consistent with a target of stabilising greenhouse gas concentration levels at 450 parts per million) with only a very modest reduction in growth.
The modelling assumes that most countries are acting by 2020, and all countries are moving by 2031.
Emissions are projected to fall significantly, while growth in world output slows only slightly.
With carbon pricing, gross world product is expected to be around 50 per cent higher than current levels by 2020.
Strong growth in low‑emission sectors will offset slower growth in high‑emission sectors.
The level of gross world product will take only 16 months longer to reach where it would otherwise have been in 2050.
At the same time, we are avoiding much larger costs from climate change for future generations.
The modelling provides information on only one element necessary for evaluating climate change policy: the costs of taking action. It is currently not possible to model all significant benefits of tackling climate change.
Continued global growth while emissions are significantly reduced
Continued global growth while emissions are significantly reduced
Gross world product
Global emissions
