Modelling the economics of climate change Understanding the full economic costs of climate change is necessary in order to guide adaptation and mitigation strategies. A comprehensive analysis of the costs associated with climate change has provided policymakers with solid guidelines to decrease these costs over the long term. Climate Change and Environment © Thinkstock While many detailed studies of climate change economics have been undertaken, gaps in the knowledge base remain. Factors like the cost of inaction, and the costs and benefits of adaptation and mitigation need to be considered to fully inform policy direction. The 'Full costs of climate change' (CLIMATECOST) project was established with EU funding for exactly this purpose. It involved developing various climate change scenarios, followed by an examination of associated economic aspects. The team came up with estimations spanning the next 100 years. Researchers found that Europe would face significant economic costs as a direct or indirect result of climate change, and that inaction would greatly increase these costs. However, they also showed that adaptation is an effective method of reducing climate change costs, particularly when combined with mitigation strategies. Project showed that flexibility in climate change management is the key to minimising economic costs. The models also showed that high climate taxes would be a successful mitigation tool. CLIMATECOST has provided a comprehensive analysis of the options available to policymakers with regards to climate change. The outcomes and recommendations of the project are already being incorporated into policy discussions, and will continue to inform decisions as we head into uncertain times.
