Make Global Warming an Economic Issue
November 7th, 2006
Last week the British Government released the Stern Report on Global Warming. As those of you who read about it know, the report suggested that, without immediate and aggressive spending, global warming will reduce worldwide productivity on the scale of the Great Depression. The report, commissioned by the British government is the most comprehensive study to date of the economic impact of global warming. The quick summary is that failure to act could cost up to 20% of lost income worldwide on an annual basis. Aggressive and immediate action to solve the problem would cost 1% of gross global domestic product.
Global warming has now been framed economically. Do nothing and have economic consequences on the order of the Great Depression, one that would almost by definition be an open ended depression, or take immediate actions across the board at an estimated 1% additional cost. Not exactly a difficult decision to make, at least if you are looking at the situation with clarity. Of course there are still people, and prominent US politicians, who say that it is ‘too expensive’ to cut greenhouse gases. We should not let these ostrich like approaches to this huge issue hold us back any longer. The scientists have weighed in on the fact that there is global warming, and now the economic consequences of the danger have been presented in a powerful way.
Economics is obviously a primary driver in the countries of the world. Economics seems to often trump other areas of life. Since this is the case, making global warming an economic issue for us all might be one way to develop a global will to solve this problem. The real possibility of suffering dire economic consequences has always been a good motivator. It is something that many people have felt, and of course those of us who had parents that grew up during the Great Depression have heard stories about how awful it was. This might be a more concrete way to get people to take action than the ‘hard to believe’ image of Manhattan and Florida under water.
The Stern report stated that the current level of greenhouse gases is 54% higher than at the beginning of the Industrial Revolution, which was about 300 years ago, a tiny blip in humanity’s time on the planet, and that it could well be double that figure by 2035. Such an increase could raise average temperatures by close to 4 degrees and a calamitous 9 degrees by the end of the century. The report stated that global warming would be most harshly felt by poor countries but that developed countries must be responsible for 60-80% of emissions reductions. The report was optimistic in that it stated if we started to act immediately we could turn global warming around. It cautioned however, that if humanity waited even a decade to begin, perhaps two decades at the outside the consequences would be the dire ones suggested
The only way to deal with the issue of global warming is through a comprehensive and coordinated international effort that so far has yet to take hold. Perhaps making the price of not taking this step a prolonged global depression might help to be the catalyst for more immediate action. We must all start to think about and speak about global warming as a coming economic catastrophe that can be prevented if we take action soon. We must all take action in our own lives to cut down on energy use and we must bring this effort into the national and international discussion. Do nothing and suffer the greatest depression in history. Politicians don’t want to be responsible for that. To quote James Carville from the 1992 presidential campaign: “It’s the economy, stupid!â€
November 8th, 2006 at 2:04 pm
The fact that Whitney got 11% of the vote for Ill. governor without much advertising shows that there may
be a critical mass that can be a catalyst. On the other hand our record on energy independence discourages optimism. But this failure is at least in part a consequence of the Bush administration. There needs to be a national and world leader. An example of such leadership is Walmart which appears single handedly to have aroused a major public assault on health care costs.
November 8th, 2006 at 10:08 pm
David,
1% worldwide gross a year doesn’t seem like a major commitment. I’m not 100% sure a concentrated and global effort is necessary. Since America is the primary culprit– I think a shift within our own countries policies would be an incredible step in the right direction.
-Paul
November 8th, 2006 at 11:29 pm
Very good point David. But in addition to fearing economic trouble in the future people should open up to all the possibilities that an energy shift could bring.
The difficulty is that Global Warming is a diabolical PR problem. It moves extremely slowly. Despite intermittent red flags like the breakup of the ice caps or the Stern report most of the damage takes place in increments too slow or abstract to capture our attention. And we are called on to make sacrifices now for payoff in the distant future.
With that in mind the consumer should be given incentives to invest in green energy. Whether it be installing their own windmills and solar panels or buying their electricity from a company that uses geothermal or something similar to provide it.
Supposing we developed a new cheap, clean, easily available power source I am sure it would provide a massive spike to economies everywhere.
One thing I do fear getting heavily penalised though is airlines. The current price of a plane ticket is much too low if you include the cost to the climate that jet fuel burnt at high altitude does.
November 9th, 2006 at 5:32 pm
You make great points. Ever since the 1991 IPCC report, the impacts of climate change HAVE been framed economically. As Jeremy Leggett points out again and again in “Carbon Wars” politicians, insurance companies, economists, et cetera the world over have known of the economic impacts for over a decade. The Stern Report, while nothing truly new, at least comes at a time when the U.S. public is paying some (little) attention. For the E.U., there is nothing quite so interesting or dramatic about this report. Politicians won’t listen to this report – they will only listen to their constituency (maybe). Pelosi laid out a six-point plan – did it include any significant environmental agenda? No. Why not? Because Dem voters do not consider environmental issues to be top of the slate. Clinton/Gore presided during Kyoto, yet actively sought to undermine this protocol. Why? No public support to offset massive corporate pressures. Now Gore runs around as some sort of high eco-priest which I find curious as, when he had the ability to act, he sat on his hands, thumbs lodged firmly.
We need to be louder. We need to make immediate demands of our elected leaders. We must not celebrate this election as a victory. Instead, it must be recognized as an opportunity, a path to a possible victory. If we sit back down, like we did in 1992 and again in 1996, we will see no rapid advances and without these, we are , at least according to James Lovelock, Lester Brown, Monbiot, Kunstler, Elizabeth Kolbert and many others, utterly screwed.
November 10th, 2006 at 10:01 am
David,
The Stern report is highly disputed and apparently has been critisized by some of the climate scientests it qoutes.
Here is Richard Tol’s response to the report:
http://sciencepolicy.colorado.edu/prometheus/archives/sternreview.doc
here are some climate scientests on what’s wrong with it:
http://sciencepolicy.colorado.edu/prometheus/archives/climate_change/000973sterns_cherry_picki.html
That said the report is quite right when it says that current economic analysis don’t take into feedback loops that have only recently been perfected and even the critic of the Stern report such as Richard Tol are still for mitigating co2 emissions now.
November 16th, 2006 at 5:28 pm
Great comments all. I think that we must continue to be loud and demanding. Always as any politician what he or she is doing regarding alternative energy and global warming. Be clear that your vote is 100% dependent on their answer.
AS to the Stern report, there is absolutely no reason to not do something to slow and then reverse global warming. Period.