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Background to Stern Review on the Economics of Climate Change

The Chancellor announced on 19 July 2005 that he had asked Sir Nick Stern to lead a major review of the economics of climate change, to understand more comprehensively the nature of the economic challenges and how they can be met, in the UK and globally.

Terms of reference
Call for evidence
Oxford Institute of Economic Policy Distinguished Lecture: 'What is the Economics of Climate Change?'
Other Presentations by Sir Nicholas Stern
Stern Review Analysis on Chinese Energy Markets
Stern Review Transport Seminar in January 2006
Stern Review Road Transport Seminar June 2006

Terms of Reference

The terms of reference of the review are to:

Examine the evidence on:

  • The implications for energy demand and emissions of the prospects for economic growth over the coming decades, including the composition and energy intensity of growth in developed and developing countries;
  • The economic, social and environmental consequences of climate change in both developed and developing countries, taking into account the risks of increased climate volatility and major irreversible impacts, and the climatic interaction with other air pollutants, as well as possible actions to adapt to the changing climate and the costs associated with them;
  • The costs and benefits of actions to reduce the net global balance of greenhouse gas emissions from energy use and other sources, including the role of land-use changes and forestry, taking into account the potential impact of technological advances on future costs; and
  • The impact and effectiveness of national and international policies and arrangements in reducing net emissions in a cost-effective way and promoting a dynamic, equitable and sustainable global economy, including distributional effects and impacts on incentives for investment in cleaner technologies

Consult with key stakeholders, internationally and domestically, to understand views and inform analysis.

Based on this evidence, provide:

  • An assessment of the economics of moving to a low-carbon global economy, focusing on the medium to long-term perspective, and drawing implications for the timescales for action, and choice of policies and institutions.
  • An assessment of the potential of different approaches for adaptation to changes in the climate.

Assess how this analysis applies to the specific case of the UK, in the context of its existing climate change goals.

Produce a report to the Prime Minister and Chancellor by Autumn 2006.

Call for Evidence

At the outset of the Review, Nick Stern invited interested stakeholders in the UK and the rest of the world, including academic, private sector, scientific, NGO and other experts, to submit evidence on all areas relevant to the Terms of Reference. The formal deadline for submitting evidence has now passed. However, the Review team will endeavour where possible to consider material we receive in the future via the contact details listed below:

Stern Review
2nd Floor, Room 35/36
HM Treasury
1 Horse Guards Road
London SW1A 2HQ
Email: callforevidence@sternreview.org.uk

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Oxford Institute of Economic Policy Distinguished Lecture: 'What is the Economics of Climate Change?’

Sir Nicholas Stern, Head of the Stern Review on the Economics of Climate Change, gave a keynote lecture to the Oxford Institute of Economic Policy as part of their distinguished lecture series entitled ‘What is the Economics of Climate Change?’ on the evening of Tuesday 31 January. This paper sets out the key approaches and questions for the Stern Review. The deadline for reactions to this paper has now passed however we will endeavour to consider belated responses received either by email (oxonia.responses@sternreview.org.uk ) or by post to the address below. The responses received can be viewed via the link below.

Links to key documents relating to Oxford Institute of Economic Policy Distinguished Lecture:

Following Sir Nick Stern’s speech to Oxonia on 31 January and the papers published alongside it, a summary article setting out these arguments has been published in World Economics. The journal also includes a critique of the work by Byatt et al, and a reply to Byatt et al from Nick Stern. The Byatt et al paper was previously published on this website as part of the responses to the Oxonia speech, alongside the other responses received. All these responses are being considered as part of the evidence base for the Review"

Other Presentations by Sir Nicholas Stern

Stern Review Analysis on Chinese Energy Markets

In response to the increasing importance of China in the global economy, the Stern Review commissioned research by the Chinese Academy of Social Sciences into the key economic and policy issues affecting its domestic energy markets. A report summarising this work is available via the link below.

Stern Review Transport Seminar in January 2006

The Stern Review hosted a seminar to discuss the drivers behind global growth in emissions from transport and the prospects for new technologies to reduce emissions.

Related links:

Stern Review Road Transport Seminar June 2006

Some of the document above are available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.

Stern Review Index
Independent Reviews Index
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Office of Climate Change
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The Office of Climate Change (OCC) works across Government to support the development of climate change policy and strategy.

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