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Climate Change and Renewable Energy

Analysis of the Stern Review on the Economics of Climate Change

The Stern Report[1], an economic analysis of the costs of mitigating global climate change posits that an investment of 1% of GDP annually would be sufficient to stabilize the climate at 550ppm of carbon emission by 2050. A T21 project carried out at Middlebury College in Vermont examined the effects of this level of investment in power sector in Ecuador.

T21 was used to run scenarios to understand how investments in demand-side efficiency measures in the power sector could help to move Ecuador away from its increasing dependence on fossil fuel. The results of the analysis show that investing 1% of GDP in the electricity sector contributes to the reduction of emissions but it is not enough to stabilize them at 2006 levels.

Environmental Studies students at Middlebury College participated in the analysis and concluded thus on the usefulness of T21 as a policy design and assessment tool:
“Although the T21 model is a useful tool for predictive analysis, it inherently reduces very complex issues to simple terms, mirroring some of the qualities of high modernism. The T21 model therefore should not be a replacement for metis, or practical “on the ground” knowledge. Instead, the T21 model should be used as a starting point to appreciate the large-scale interactions between different sectors before addressing issues at a finer scale.”

For further information about T21-Ecuador, contact Andrea Bassi at .


[1] Stern, Sir Nicolas. 2006. Executive Summary, Stern Review on the Economics of Climate Change. New Economics Foundation.

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