Stern Review on Global Warming
Ted wrote: The recently published UK Stern Report has gained much reaction. The full STERN REVIEW: The Economics of Climate Change Summary of Conclusions There is still time to avoid the worst impacts of climate change, if we take strong action now.
text and various summaries and slide presentations are attached as
additional background for our meeting next month. Stern is at least as
pessimistic as Monbiot
The scientific evidence is now overwhelming: climate change is a serious global threat, and it demands an urgent global response. This Review has assessed a wide range of evidence on the impacts of climate change and on the economic costs, and has used a number of different techniques to assess costs and risks. From all of these perspectives, the evidence gathered by the Review leads to a simple conclusion: the benefits of strong and early action far outweigh the economic costs of not acting. Climate change will affect the basic elements of life for people around the world – access to water, food production, health, and the environment. Hundreds of millions of people could suffer hunger, water shortages and coastal flooding as the world warms. Using the results from formal economic models, the Review estimates that if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more. In contrast, the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year. The investment that takes place in the next 10-20 years will have a profound effect on the climate in the second half of this century and in the next. Our actions now and over the coming decades could create risks of major disruption to economic and social activity, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20 century. And it will be difficult or Climate change could have very serious impacts on growth and development. impossible to reverse these changes. So prompt and strong action is clearly warranted. Because climate change is a global problem, the response to it must be international. It must be based on a shared vision of long-term goals and agreement on frameworks that will accelerate action over the next decade, and it must build on mutually reinforcing approaches at national, regional and international level.
If no action is taken to reduce emissions, the concentration of greenhouse gases in the atmosphere could reach double its pre-industrial level as early as 2035, virtually committing us to a global average temperature rise of over 2°C. In the longer term, there would be more than a 50% chance that the temperature rise would exceed 5°C. This rise would be very dangerous indeed; it is equivalent to the change in average temperatures from the last ice age to today. Such a radical change in the physical geography of the world must lead to major changes in the human geography – where people live and how they live their lives. Even at more moderate levels of warming, all the evidence – from detailed studies of regional and sectoral impacts of changing weather patterns through to economic STERN REVIEW: The Economics of Climate Change vii
models of the global effects – shows that climate change will have serious impacts on world output, on human life and on the environment. All countries will be affected. The most vulnerable – the poorest countries and populations – will suffer earliest and most, even though they have contributed least to the causes of climate change. The costs of extreme weather, including floods, droughts and storms, are already rising, including for rich countries. Adaptation to climate change – that is, taking steps to build resilience and minimise costs – is essential. It is no longer possible to prevent the climate change that will take place over the next two to three decades, but it is still possible to protect our societies and economies from its impacts to some extent – for example, by providing better information, improved planning and more climate-resilient crops and infrastructure. Adaptation will cost tens of billions of dollars a year in developing countries alone, and will put still further pressure on already scarce resources. Adaptation efforts, particularly in developing countries, should be accelerated. The costs of stabilising the climate are significant but manageable; delay would be dangerous and much more costly.
The risks of the worst impacts of climate change can be substantially reduced if greenhouse gas levels in the atmosphere can be stabilised between 450 and 550ppm CO e today, and it is rising at more than 2ppm each year. Stabilisation in this range would require emissions to be at least 25% below current levels by 2050, and perhaps much more. Ultimately, stabilisation – at whatever level – requires that annual emissions be brought down to more than 80% below current levels. This is a major challenge, but sustained long-term action can achieve it at costs that are low in comparison to the risks of inaction. Central estimates of the annual costs of achieving stabilisation between 500 and 550ppm CO e are around 1% of global GDP, if we start to take strong action now. Costs could be even lower than that if there are major gains in efficiency, or if the strong co-benefits, for example from reduced air pollution, are measured. Costs will be higher if innovation in low-carbon technologies is slower than expected, or if policy-makers fail to make the most of economic instruments that allow emissions to be reduced whenever, wherever and however it is cheapest to do so. It would already be very difficult and costly to aim to stabilise at 450ppm CO e. If we delay, the opportunity to stabilise at 500-550ppm CO e may slip away. Action on climate change is required across all countries, and it need not cap the aspirations for growth of rich or poor countries.
The costs of taking action are not evenly distributed across sectors or around the world. Even if the rich world takes on responsibility for absolute cuts in emissions of 60-80% by 2050, developing countries must take significant action too. But developing countries should not be required to bear the full costs of this action alone, and they will not have to. Carbon markets in rich countries are already beginning to deliver flows of finance to support low-carbon development, including through the Clean Development Mechanism. A transformation of these flows is now required to support action on the scale required. STERN REVIEW: The Economics of Climate Change viii
Action on climate change will also create significant business opportunities, as new markets are created in low-carbon energy technologies and other low-carbon goods and services. These markets could grow to be worth hundreds of billions of dollars each year, and employment in these sectors will expand accordingly. The world does not need to choose between averting climate change and promoting growth and development. Changes in energy technologies and in the structure of economies have created opportunities to decouple growth from greenhouse gas emissions. Indeed, ignoring climate change will eventually damage economic growth. Tackling climate change is the pro-growth strategy for the longer term, and it can be done in a way that does not cap the aspirations for growth of rich or poor countries. A range of options exists to cut emissions; strong, deliberate policy action is required to motivate their take-up.
Emissions can be cut through increased energy efficiency, changes in demand, and through adoption of clean power, heat and transport technologies. The power sector around the world would need to be at least 60% decarbonised by 2050 for atmospheric concentrations to stabilise at or below 550ppm CO e, and deep Climate change demands an international response, based on a shared understanding of long-term goals and agreement on frameworks for action. emissions cuts will also be required in the transport sector. Even with very strong expansion of the use of renewable energy and other lowcarbon energy sources, fossil fuels could still make up over half of global energy supply in 2050. Coal will continue to be important in the energy mix around the world, including in fast-growing economies. Extensive carbon capture and storage will be necessary to allow the continued use of fossil fuels without damage to the atmosphere. Cuts in non-energy emissions, such as those resulting from deforestation and from agricultural and industrial processes, are also essential. With strong, deliberate policy choices, it is possible to reduce emissions in both developed and developing economies on the scale necessary for stabilisation in the required range while continuing to grow. Climate change is the greatest market failure the world has ever seen, and it interacts with other market imperfections. Three elements of policy are required for an effective global response. The first is the pricing of carbon, implemented through tax, trading or regulation. The second is policy to support innovation and the deployment of low-carbon technologies. And the third is action to remove barriers to energy efficiency, and to inform, educate and persuade individuals about what they can do to respond to climate change.
Many countries and regions are taking action already: the EU, California and China are among those with the most ambitious policies that will reduce greenhouse gas emissions. The UN Framework Convention on Climate Change and the Kyoto Protocol provide a basis for international co-operation, along with a range of partnerships and other approaches. But more ambitious action is now required around the world. STERN REVIEW: The Economics of Climate Change ix
Countries facing diverse circumstances will use different approaches to make their contribution to tackling climate change. But action by individual countries is not enough. Each country, however large, is just a part of the problem. It is essential to create a shared international vision of long-term goals, and to build the international frameworks that will help each country to play its part in meeting these common goals. Key elements of future international frameworks should include: ·
Expanding and linking the growing number of emissions
·
Informal co-ordination as well as formal agreements can
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The loss of natural forests around the world
·
The poorest countries are most vulnerable to climate change. It is
essential that climate change be fully integrated into development policy, and that
rich countries honour their pledges to increase support through overseas
development assistance. International funding should also support improved
regional information on climate change impacts, and research into new crop
varieties that will be more resilient to drought and flood.
contributes more to global emissions each year than the transport sector.
Curbing deforestation is a highly cost-effective way to reduce emissions; largescale
international pilot programmes to explore the best ways to do this could get
underway very quickly.
boost the effectiveness of investments in innovation around the world. Globally,
support for energy R&D should at least double, and support for the deployment of
new low-carbon technologies should increase up to five-fold. International cooperation
on product standards is a powerful way to boost energy efficiency.
trading schemes around the world is a powerful way to promote cost-effective
reductions in emissions and to bring forward action in developing countries:
strong targets in rich countries could drive flows amounting to tens of billions of
dollars each year to support the transition to low-carbon development paths.
Ted wrote:
Hi Laurie - I'm impressed! You will recall that Monbiot says that emissions must be reduced by 90%! If you dont reduce home heating emissions by 90%, you have got to look elsewhere for opportunities for even higher reductions.. I dont yet see the light at the end of the tunnel.. As you know, some solutions that have been put forward include the buying and selling of carbon credits. I dont know whether this will allow you to buy yourself out of the problem resulting in the rich to continue driving SUVs and owning second residences or not. If it does, I think it will be a tough political sell. This is an important question for discussion next month.
Posted by: Ted | January 14, 2007 at 07:47 PM
Laurie wrote:
Hey Ted,
Sorry - I should have clarified. I remember that Monbiot says developed nations must reduce carbon emissions by 90% and Canada is looking at reductions of 94% in his scheme. But when you mentioned a specific reduction in indoor heat to 16/60 degrees, I assumed you had some starting point - or interim goal - in mind. Hence my question. Or, to put it another way, by when do you think we need to drive our internal heat down to 16. You will recall there is a touching excerpt in the book about a man taking a shower after a squash game and reflecting that his grandchildren might never experience this. After living at 18 I can understand what he means!
I'm dubious about how much the carbon credits will do. I believe they are part of the solution but am concerned they will become just another scam in too many cases. As you know, China has become a repository for many of these carbon debits. Companies from the West are setting up pollution scrubbers etc in China - where the costs are much less - to claim credits in the West. Great, except a) there is no monitoring of the effect, b) China as a whole remains uncommitted to reduce carbon emissions so in some ways this just constitutes a licence to carry on business as usual.
I think we have to start - quickly - somewhere and even though we are going to be facing pain as a nation, we also have to sell this to the population as a whole. I don't see how we can start by having us shivering in the dark and hope to make any progress. I guess I'm looking for a road map here or at least the first signpost.
Regards,
Laurie
Posted by: Laurie | January 14, 2007 at 11:11 PM