The Stern Review, published five years ago this fall, framed the threat of climate change in stark, even shocking, economic terms. The 700-page analysis, which was commissioned by the U.K. government and authored by Nicholas Stern, an economic adviser to Prime Minister Tony Blair and a former chief economist of the World Bank, estimated that the costs of climate change, if not addressed, will be equivalent to losing 5 percent (and potentially as much as 20 percent) of the global gross domestic product (GDP) "each year, now and forever." Hundreds of millions of people could be threatened with hunger, water shortages, and severe economic deprivation. Climate change, Stern wrote, "is the greatest market failure the world has ever seen."

The report concluded that staving off such crises would require immediate investments equivalent to 1 percent of global GDP over each of the next 10 to 20 years, before the window of opportunity to mitigate the biggest impacts of climate change closes. And it argued that governments need to set a price on carbon dioxide emissions, through either a tax, a trading scheme, or direct regulations.