Combating climate change is economically more advantageous than inaction
The Stern report marked a watershed in the field of climate change. In 2006, Sir Nicholas Stern, former chief economist of the World Bank, former chief economist at the EBRD, a professor at the London School of Economics and a senior official at the UK Treasury, published a report concluding that a failure to take action on climate change could cost us up to 20% of world GDP, considering the losses from extreme weather events, whereas a proactive approach would cost less than 1% of world GDP.
Since 2006, many studies and authors have expanded upon the economic impact of climate change from different perspectives.
The IPCC believes at this point that the cost of implementing the policies needed so as not to exceed 2 °C is between 0.04% and 0.14% per annum of global GDP growth, while the impact of doing nothing is difficult to measure but it is very high in the medium term, considering the damage caused by extreme weather events.
But we should not focus only on the costs of combating climate change. The cost analyses fail to consider the benefits to accrue from reducing emissions. For example, better air quality has an immediate impact on people's health and, consequently, on the costs incurred by healthcare systems.
More importantly, the overall effect is a transition towards a new economic model in which we must seek new opportunities; in this context, Europe and Spain are in an excellent starting position.
Guest post written by Carmen Becerril Martínez, External Director from ACCIONA, and Magdalena García Mora, Manager of Analysis of Energy policies and Climate Change from ACCIONA.