The climate challenge: business as usual is not an option
The global climate is changing, and the release of greenhouse gases (GHGs) from human activity
has contributed to global warming. While there is significant uncertainty about the costs of inaction, it is generally agreed that failing to tackle climate change will have significant implications for the world economy, especially in developing countries, where reduced agricultural yields, sea level rise, extreme
weather events and the greater prevalence of some infectious diseases are likely to be particularly
disruptive (OECD, 2008a). Furthermore, there are significant risks of unpredictable, potentially large and irreversible, damage worldwide. The exact economic and welfare costs of policy inaction could equate to
as much as a permanent 14.4% loss in average world consumption per capita (Stern, 2007), when both
market and non-market impacts are included.
To understand how to best tackle these challenges, Chapter 1 provides a picture of what emissions
and temperatures would be like over the next half century in the absence of new policy action. This is referred to as the business-as-usual (BAU) baseline.
This is not meant to be a realistic course of events, but provides a basis against which the economic implications of climate change mitigation efforts can be assessed. Under this business-as-usual scenario, world GHG emissions, which have roughly doubled
since the early 1970s, would nearly double again between 2008 and 2050. As a result, atmospheric concentrations of CO2 and GHGs more broadly would increase to about 525 parts per million (ppm) and 650 ppm CO2 equivalent (CO2eq) in 2050, respectively, and continue to rise thereafter. This could cause mean global temperatures to be about 2°C higher than they were in pre-industrial times in 2050, about 4-6°C higher by 2100, and higher still beyond that.
