4.11 Whilst the figures provided in this paper, based on a 1997 European Commission study,
include an element of external costs due to greenhouse gases, we do not re-examine the issues
and costs attached to the wider environmental impacts of reducing greenhouse gases on the
global economy. This is an area which has developed cogency over recent years, although the
figures are still highly contested. Most recently, the Stern Review on the Economics of
Climate Change (October 2006, HM Treasury) argued that strong and early action aimed at
reducing carbon emissions is vital to combating climate change, and that delays in action
would lead to serious implications in terms of costs of mitigation. As the figures provided
here do not include the enhanced costs linked to ‘non-action’, they should be seen as
conservative.
The economic case
4.12 The economic case is built on a three-stage model:
• the reduction in car kilometres
• the impacts of this reduction on pollutants
• the cost saving attributable to these impacts