Sunday, May 06, 2007

IPCC Report: Fixing Climate Change Is Cheap

Reason Magazine - Fixing Climate Change Is Cheap: "Even the most stringent goal of following a greenhouse gas (GHG) emissions reduction trajectory that aims to stabilize greenhouse concentrations at around 535 parts per million (ppm) would reduce annual GDP growth rates by less than 0.12 percent per year by 2030. In that scenario, global GDP in 2030 would be 3 percent lower than it would otherwise have been without emissions reductions. The current world GDP is around $47 trillion, and in 23 years, at 3 percent per year growth rate, it would double to about $94 trillion without any emissions reductions. A 3 percent GDP reduction in 2030 implies that world GDP would drop to $91.3 trillion. In other words, putting humanity on a path to stabilizing GHG concentrations to below the equivalent of 535 ppm of carbon dioxide in the atmosphere would cost humanity an average of $117 billion per year in lost economic growth for the next 23 years."

"The summary projects that keeping GHG concentrations below the equivalent of 535 ppm of carbon dioxide would eventually raise global average temperatures by about 2 degrees Celsius (3.6 degrees Fahrenheit) above current temperatures, keeping in mind that average global temperature today is estimated to be 0.8 degrees Celsius (1.4 degrees Fahrenheit) above what it was in 1850. In order to stabilize GHG at 535 ppm, emissions will have to peak before 2020 and must fall by 2050 to 30 to 60 percent below what they were in 2000."

"Yale economist William Nordhaus suggests that the optimal carbon tax trajectory balancing costs and benefits would start with a tax of about $17 per ton of carbon rising to $84 per ton in 2050 and $270 in 2100. But what if climate change is not predictably gradual? As the SPM3 notes, "if the damage cost curve increases steeply, or contains non-linearities (e.g. vulnerability thresholds or even small probabilities of catastrophic events), earlier and more stringent mitigation is economically justified." Doesn't the remote chance of climatic catastrophe suggest that humanity might want to purchase some extra insurance against that possibility?"

"In any case, the range of proposed policy interventions in the SPM3 report including renewable energy mandates, producer subsidies, mandatory fuel economy standards, subsidies to public transportation, appliance and building standards, energy efficiency tax credits, and so forth leave a lot of scope for counterproductive government meddling and rent-seeking. The simplest policy aimed at reducing GHG emissions would be an internationally harmonized carbon tax. Increasing the price of carbon-based energy would encourage transport, industry, and residential fuel efficiency. There would be no need to set appliance or building code standards or offer subsidies to companies and consumers to switch to low-carbon sources of energy. Furthermore, subsidies or tax credits for companies to develop new low-carbon technologies would not be necessary-higher carbon energy prices by themselves will encourage energy supply innovation."

The case for the carbon tax seems convincing to me. The problem is lack of political will, or the fact that in our degenerate corporate/liberal democracy, the major political parties are controlled not by the public or the common good but by the short term profit interests of the fossil fuel industry.

No comments: