The Economics of Climate Change and Global Health

Abstract

Global climate change poses a threat to the well-being of humans and other living things through impacts on ecosystem functioning, biodiversity, capital productivity, and human health. Climate change economics attends to this issue by offering theoretical insights and empirical findings relevant to the design of policies to reduce, avoid, or adapt to climate change. The primary goal of this paper is to review the most relevant papers on economics of climate change and health and what adaptation and mitigation policies are available and what impact climate change has on global health. A systematic search of literature published from 1993-2011 was conducted. Grey literature (conference papers, technical reports), journal articles, abstracts, relevant books and internet articles were reviewed. Results showed that economic analysis has yielded estimates of mitigation benefits and improved understanding of costs of climate change action. These costs include costs of mitigation, adaptation, transition to new technologies and sources of energy. The costs of climate inaction – the difference between costs under the “business-as-usual“ scenarios and an optimistic “rapid stabilization” scenario – are the human, economic, and environmental damages that may be avoidable with timely actions to reduce green house gas emissions. Furthermore, inaction on climate change would lead to damages worth 5% - 20% of gross domestic product (GDP) and most of these damages could be prevented by spending 1% of GDP on mitigation. In conclusion, when costs are incurred to reduce emissions today, the benefits of reduced climate change will occur decades or centuries later implying that it makes economic sense to take action now to secure those future benefits and stem the effects of climate change on global health.

Key words: Climate change, Cost, Economics, Global Health, Mitigation, Adaptation