Middle of the road ... towards a cliff

• David Spratt

• August 8, 2008
• http://business.theage.com.au/business/middle-of-the-road--towards-a-cliff-20080807-3rsj.html
• Gallery Spooner's view

THE economic merit of competing climate policy options will soon find a focus in the final Garnaut review and Treasury modelling on the impacts of global warming on Australia, but there are risks in reading too much into it.

The modelling will be debated, possibly till we feel drowned in a sea of claim and counter-claim, but there may be more heat than light, for three reasons.

First, the big-picture questions are less amenable to political opportunism than quips about petrol prices and China. Will human action lead to the destruction of a big part of the economy's physical basis through multi-metre sea-level rises, for example?

Second, a model is a simplified and limited version of something complex, so it is unwise to take it as representing the whole story. The available models had trouble dealing with some emissions targets. The nature of the modelling process means many issues that should be part of rational decision-making will be excluded, because only market events with strictly quantifiable prices will be included.

Garnaut has recognised the "conventional economic effects that are not currently measurable, the possibility of much larger costs from extreme outcomes, and costs that aren't manifested through markets". For example, Garnaut explicitly says the multibillion-dollar impact on the tourism industry in northern Australia from the loss of most of the Barrier Reef (now inevitable) and of Kakadu (through salination) will not be modelled.

The cost of reducing emissions is largely quantifiable and will likely be fully described, but in tabulating the price we will pay for not acting, many of the adverse effects of global warming will not figure. Thus, the published modelling will be a poor reflection of the total impacts, placing no price on economic loss from ecosystem degradation, or such values as human displacement or the loss of life, biodiversity and environmental amenity. Thus while the report will conclude it is wiser to act, it will underemphasise the economic importance of doing so.

Third, the assumptions underlying the specific modelling may not be valid. Garnaut says the modelling will be based on "middle-of-the-road outcomes on temperatures and decline in rainfall", but these are unlikely to eventuate because climate change is now veering dangerously on the wrong side and headed for a great crash, driven by global carbon emissions rising much faster than in even the most pessimistic scenario considered by the Intergovernmental Panel on Climate Change. Many of the impacts, such as the impending loss of an area of summer sea ice in the Arctic the size of Australia, and the destruction of huge ice shelves in both polar regions, are happening much earlier, and at lower temperature increases, than predicted, with global repercussions.

n fact, the worst predictions are coming true. Garnaut has frankly recognised the "bad possibilities" with "immense impacts" and "highly adverse outcomes", but says there is only a "10% chance" of these occurring. Even if it were only 10%, a risk management approach would nevertheless demand we take the "bad possibilities" into account.

Yet in reality they are now overwhelmingly likely to happen unless emergency action is taken to change direction.

A final hurdle concerns targets. Garnaut has already said that the climate science demands emissions reduction rates much faster than the Government seems willing to contemplate.

The Government's climate policy framework is already out of date; its target of 550 parts per million atmospheric carbon dioxide, which Garnaut has been asked to model, is equivalent to a three-degree target, according to Nicholas Stern. Yet a three-degree rise would destroy the Barrier Reef, Kakadu and the tropical rainforests, cause widespread desertification, large-scale species loss and a sea-level rise of tens of metres, if it were reflected in similar policies around the globe.

Yet the Government seems unaware that a three-degree rise would kick the climate into a new state that would not support humans, as planet-changing "tipping points" are crossed, such as devastating loss of carbon from deteriorating rainforests and melting Siberian permafrost. Tens, perhaps hundreds, of millions of people will not survive. In Asia, 1.3 billion people whose homes lie in the basins of the great rivers that flow from the melting ice cap of the Hindu Kush-Himalayan ranges are vulnerable if spring melt-water is lost, yet it is predicted those mountains will be glacier-free by 2040, or earlier.

But such outcomes are not for modelling, lacking the capacity for strict quantification.

David Spratt is co-author of Climate Code Red: The Case for Emergency Action, published by Scribe.