China’s Low-Carbon Economy and its Target China’s Low-Carbon
Economy and its Target The impact of climate change is global,
and it demands urgent action. According to the Stern Review,
“Business-As-Usual” (BAU) will cost five to ten percent of
global GDP in 2050. However, if measures to reduce greenhouse
gas emissions are taken now, the macroeconomic costs will
bebetween a one percent gain to a 5.5 percent decrease of global
GDP and less than an eighth of a percentage point in annual GDP,
the Intergovernmental Panel on Climate Change (IPCC) predicts in
its Fourth Assessment Report. McKinsey Global Institute put
these figures in perspective: if one were to view this spending
as a form of insurance against potential damage due to climate
change, it might be relevant to compare it to global spending on
insurance, which was reached 3.3 percent of GDP in 2005. The
treatment of crucial assumptions on global energy consumption
scenarios and the use of top-down economic modeling (for
example, estimating the effect th