Climate action benefits outweigh costs for nations: LSE study

Ilario D'Amato
Reading time: 3 minutes
13 July 2015

LONDON: Countries that put forward climate actions will see national benefits that outweigh the costs of mitigation, according to a new study from the London School of Economics (LSE).

The LSE study by Fergus Green, policy analyst and research advisor to Professor Stern, collates for the first time a unified framework to assess costs and benefits for nations in tackling climate change.

“The LSE study adds to the mounting evidence that investing in a clean, low carbon future makes good business sense,” says Mark Kenber, CEO, The Climate Group. “This is why we consider that the Intended Nationally Determined Contributions (INDCs) - countries’ pledges for addressing climate change past 2020 – should be seen as investment prospectuses for low carbon growth.

“Although Climate Change is a global issue, the disruption it causes is felt locally and efforts to tackle it can bring important local benefits, especially in areas such as air pollution. In China, this has reached the status of a true emergency, with Premier Li Keqiang declaring a ‘war on pollution’ last year. The case for action is underlined by the fact pollution is now impacting over 10% of China’s GDP, according to The New Climate Economy Report.

Energy efficiency and energy security are two solutions that lead not only to an improved environment, but save money. Many of the world’s most influential businesses are even shifting toward going 100% renewable energy with our RE100 campaign – and seeing an improvement to their bottom lines today.”


So far, the political discussion about climate change has been dominated by the so-called ‘prisoner dilemma’, the report states. This means if a nation takes climate action – paying the upfront cost of such mitigation – the benefits of reducing global emissions are spread between all other countries.

The LSE study is important for understanding this perspective, because for the first time it puts together social studies about cost-benefit analysis that were previously fragmented in the academic world, and so unable to change the prejudice around this area.

“The majority of the global emissions reductions needed to decarbonize the global economy can be achieved in ways that are nationally net-beneficial to countries, even leaving aside the ‘climate benefits’,” writes the author of the study.

“All things considered, I conclude that there is a very strong case that most of the mitigation action needed to stay within the internationally agreed 2°C limit is likely to be nationally net-beneficial”.

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by Ilario D'Amato

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