How Climate Change is Revolutionizing Economics

"The benefits of strong, early action on climate change outweigh the costs."

The sentence appears as a paragraph by itself, in bold, in the Executive Summary of the now-released, much-anticipated Stern Review on the Economics of Climate Change.

The numbers underscore the point: addressing the problem now will cost about 1% of GDP per year. Doing nothing, say the economic models, will cost the world the loss of 5% GDP per year -- "now and forever" says the report, evoking an almost religious tone. That 5% figure is actually the best case scenario for doing nothing: if all the risk factors are taken into account, and they all hit home (an appropriate phrase in this case, since our homes are what they will hit), then the figure could be as high as 20%.
This conclusion, and these figures, are what will be most remembered about this report -- that, and the media/policy splash it's making. We'll get into the details (there are 700 pages of them, so we certainly won't get into too many) later in this article. Let's first consider the frame and context.