A new study suggests that the standard model used to measure the economic risk of climate change is underestimating the true costs. The dynamic integrated climate-economy (DICE) model was developed in the 1990s and has been used widely to estimate impacts to the global economy.
In a press release from the London School of Economics, the lead author, Dr Simon Dietz said: “While this standard economic model has been useful for economists who estimate the potential impacts of climate change, our paper shows that some major improvements are needed before it can reflect the extent of the risks indicated by the science. Our aim was to show how a new version of the model could produce a range of results that are much more representative of the science and economics of climate change, taking into account the uncertainties. The new version of this standard economic model, for instance, suggests that the risks from climate change are bigger than portrayed by previous economic models and therefore strengthens the case for strong cuts in emissions of greenhouse gases.”