Crank up global temperatures by 30-odd degrees and humans could plummet toward extinction. Yet one of the world's most cited economic models on climate-change effects projects just a 50 percent reduction in global economic output if temperatures rise that much.
That's an example of how substantially we've been underestimating the costs of climate change. So argues a new peer-reviewed paper in The Economic Journal written by Nicholas Stern, author the famed 2006 Stern report on the economics of climate change, and Simon Dietz, both of the Grantham Research Institute on Climate Change and the Environment.
And, in part because we're relying on an outdated economic model, carbon-trading programs are woefully undercharging polluters for their climate-wrecking emissions.