Britain: Global Warming Will Cost $9.6 Trillion by 2100
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Global warming may cost the world as much as $9.6 trillion by the next century because of the effects of famine, rising sea levels, storms, and other environmental damage, a study for the British government indicates.
“Climate change will affect the basic elements of life for people around the world: access to water, food production, health, and the environment,” the government’s chief economist, Nicholas Stern, said in a 600-page report published in London yesterday. “Hundreds of millions of people could suffer hunger, water shortages, and coastal flooding as the world warms.”
The findings, endorsed by Prime Minister Blair, are part of Britain’s effort to return President Bush to international talks on the environment. Mr. Bush in 2001 rejected the Kyoto Protocol, which limits emissions from burning oil, coal, and natural gas that are blamed for damaging the Earth’s climate.
“The Bush Administration has called a halt to dealing with global warming for nearly seven years now, and what the British government report shows is that we cannot wait any longer,” said Philip Clapp, the head of the National Environmental Trust, a Washington-based consultant who advised the American government on climate talks.
E.U. nations along with Japan and Russia have implemented the 1997 Kyoto protocol mandating rich industrial nations cut emissions from burning fossil fuels by 2012. America, the source of a quarter of the world’s pollution, is talking with the European Union about ways to cut that avoid the Kyoto process.
Mr. Stern’s report is the latest to sound an alarm for policy makers about the costs of doing nothing. It sketches the need for a shift in British taxes and laws to combat climate change, shaping the policies the Labour government will endorse. Chancellor of the Exchequer Gordon Brown, favorite to take over when Mr. Blair retires, joined environmental groups in supporting the report.
“Unless the U.K. presents an economically compelling example to the developing world, our climate change policy will be little more than a futile gesture,” a spokeswoman for the Renewable Energy Foundation, Margareta Stanley, which promotes clean forms of energy, said. “The Stern review shows just how difficult this will be.”
Airlines and utilities may be hit hardest by limits on pollution. Neither Mr. Stern nor Mr. Blair discussed specific taxes that would be used to limit emissions, saying those matters would be announced by Mr. Brown in a budget.
Companies and the Confederation of British Industry embraced the report, saying it would provide them some certainty about how the government would address the issue.
“I am sure that his report will prove a very important and decisive trigger to our understanding of how climate change will affect us all,” Vincent de Rivaz, who is the head of EDF Energy, which owns the utility generating power for London, said. “It highlights the new realities we have to deal with.”
EasyJet Plc, Europe’s second-biggest low-cost airline, said the measures would benefit carriers that fill their planes at the expense of traditional network airlines such as British Airways Plc.
“Low-fare airlines have done exactly this by introducing a new way of flying that is incredibly more efficient than the old way of flying half-empty aircraft in and out of congested hub airports,” the chief executive of EasyJet, Andy Harrison, said. “We fly brand-new aircraft, and we fly them as full as possible.”
Mr. Stern said the consequences of taking a “business-as-usual” approach, whereby emissions of gases from burning fossil fuels increases at its current rate, would cost the world economy more than preventative steps taken now.
The overall cost of climate change “now and forever” will amount to between 5% and 20% of the world’s gross domestic product if governments fail to act, Mr. Stern said. That would mean climate change would cost as much at $9.6 trillion at today’s prices, assuming Mr. Stern’s worst-case scenario and taking the International Monetary Fund’s estimate of $49 trillion for the world’s GDP in 2006. Developed countries must cut emissions caused by burning oil and coal between 60% and 80% by 2050 to prevent famine, destruction of coral reefs, and the disappearance of glaciers, the review said.
To achieve the ultimate goal of stabilizing the levels of carbon dioxide and other so-called Greenhouse gases, emissions need to be cut by more than 80%. Mr. Brown endorsed a 60% cut.
“The costs of action to reduce greenhouse gas emissions to avoid the worst impacts of climate change can be limited to around 1% of global GDP each year,” Mr. Stern said. “If we take no action to control emissions, each ton of carbon dioxide that we emit now is causing damage worth at least $85.”
Mr. Stern set out three steps for world leaders and corporations to take. The first is putting a price to carbon emissions “so that people are faced with the full social costs of their actions,” he said. “There is still time to avoid the worst impacts of climate change.”