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Published in The Japan Times 27th July 2005
By David Howell
Counting the Costs of Climate Change
LONDON – People who arrive at parties which are in full swing , and then ask who
is paying and how much the party costs , are usually regarded as party poopers
and general spoilsports who should either keep their views to themselves or
withdraw.
Just at the moment the global warming party is at its height and it is
considered very negative indeed – almost bad manners – to question the colossal
costs of fulfilling the Kyoto Protocol targets for reducing carbon dioxide
emissions, or to ask whether the benefits fully justify the outlays.
Yet a recent report from a very high-powered committee in the British House of
Lords the other day did just that.
The Report* , entitled The Economics of Climate Change, fully accepted the heavy
scientific consensus in favour of global warming (although not everyone does)
and the high probability that the recent acceleration in the warmth of the
planet is man-made.
What it queried was whether the elaborate goals set out in the Kyoto plan ,
requiring industry to cut carbon emissions by a target date ( 12.5 percent
reduction below 1990 levels by 2008-12) , or where firms could not do so, to
purchase, at heavy cost, the right to emit more carbon from those enterprises
which were producing below target (the so-called carbon emission trading
scheme), would actually make much difference to global warming , or whether the
money involved might be better spent in other ways.
The scepticism of the expert Lords and their distinguished advisers was based on
four main considerations.
First, even if the Kyoto targets are fully achieved, the net effect on the
atmosphere , and on the generation of carbon dioxide and other greenhouse gases,
will be minimal. At best it is calculated that the anticipated global
temperature increase by the year 2100 might be reduced from 2.1 degrees
centigrade to 1.8 degrees, a miniscule improvement in a deteriorating situation.
Second, even to get anywhere near full achievement will be doubtful, because the
compliance pressures are weak and ineffectual, the opportunities for ignoring
the targets where they prove difficult are large and ,anyway, the biggest
‘offenders’ in burning fossil fuels and adding to planetary warming , namely the
USA, China, India , show few signs of wanting to join the scheme.
Third, fossil fuel consumption will continue to climb regardless, mainly because
the developing countries will expand their thirst for oil, gas and coal , (as
China is already doing), with estimates that, at the bare minimum, oil
consumption will rise from the present level of 84 million barrels a day to 122
million by 2020.
Fourth, since global warming will occur anyway over the coming decades, it might
be far better to spend resources in developing measures to adapt to the
inevitable, rather than trying desperately to curb carbon emissions through
targets which will slow economic growth, handicap developing societies and limit
the very resources so badly needed to meet the oncoming challenges – such as
increasing violent weather patterns, rising sea-levels and other extreme events
, ranging from earthquakes and tsunamis to droughts and disease pandemics.
In short, it might be wiser to put the emphasis on adaptation, predominantly at
local level, and on practical technological change , such as a switch to nuclear
generated electricity from coal and oil burning, rather than world-wide attempts
at mitigation. That would mean more encouragement to micro and local schemes to
adapt lifestyles, agricultural crops and housing, for example, to warmer
climatic conditions rather than relying on global scale programmes and targets.
The Lords Report also adds that in some ways the effects of global warming could
prove beneficial, especially for the colder countries of Northern Europe, and
these benefits should also taken into account in assessing the net social cost
of emitting an extra tonne of carbon into the atmosphere.
The experts admit that while the benefits of Kyoto-type measures are modest and
uncertain the costs of achieving them are equally uncertain, and may be anything
world-wide between $2 trillion and $17 trillion to get to the eventual Kyoto
goals. The figures would depend upon the type of cleaner fuel technologies
adopted, on the type of alternative energy sources developed and of course on
the overall world rate of growth.
For the UK, which has translated the overall Kyoto goal into a target of 60
percent reduction in emissions by 2050, the Report claims that the cost of
getting there would be between £60 and £400 billions (roughly $102 and $690
billion). But of course the results in terms of actual atmospheric improvement
would depend on whether other nations were also complying rigorously . The UK
aim would in reality be to set an example which others might, or might not,
follow – a huge expenditure bet resting on optimism and hope.
Set against these vast sums must go an estimate, however rough, of the actual
monetised damage that the UK would suffer if global temperatures rose that
little bit faster than they will anyway.
The expert conclusion is that for richer countries such as the UK this damage
might not be very great, and could certainly be eased by the right technologies
based on the right research. For the poorer nations the damage might be much
greater . Perhaps the tsunami in the Indian Ocean last December was a grim
harbinger of problems to come, with or without the Kyoto disciplines.
As usual it looks as though the poorer parts of the globe are due to suffer
most, whatever actions are taken. It is a very unfair world.
Ends
www.lordhowell.com
* UK House of Lords Committee on Economic Affairs. ‘The Economics of Climate
Change’, published July 6th 2005
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