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Climate Change Economics - IMF says risks to growth are higher with inaction

Graham Watson

6th October 2022

A classic example of a trade-off - between cutting carbon emissions and economic growth, with the IMF warning that getting to net zero will impact growth, but that the cost of this will be significantly less than the failure to act.

The problem is that to reach Paris climate change targets will require a 25% reduction in carbon emissions in 8 years. Such action would reduce economic growth by between 0.15 and 0.25% and add between 0.1 and 0.4% to inflation in that time.

Read: Navigating a more fragile world

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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