Monday, July 20, 2009

IPCC chief: Benefits of tackling climate change will balance cost of action

The cost of tackling climate change will be paid for by benefits that would come from better energy security, employment and health, Rajendra Pachauri says ahead of major announcement on 2013 reports

Measures needed to tackle global warming could save economies more money than they cost, the world's top climate change expert said today.

Rajendra Pachauri, the head of the Intergovernmental Panel on Climate Change (IPCC), told the Guardian: "The cost could undoubtedly be negative overall." This is because of the additional benefits that reducing greenhouse gas emissions could bring, beyond limiting temperature rises.

Until now, estimates of the price of preventing dangerous climate change have all indicated significant costs. The most authoritative study, the 2006 Stern report, concluded that 1% of global GDP would be required, and he has since said 2% is now more likely.

Pachauri's comments came ahead of a press announcement in New York today about the IPCC's plans for its next series of reports in 2013. He said these would include a greater emphasis on the economics, as well as ethical and humanitarian concerns.

Funding for reducing and adapting to climate change in one of the most difficult issues in the negotiations towards a global deal at a UN summit in December in Copenhagen. But Pachauri argues that if the costs are negative, then "inertia and vested interests would be washed away. As the Americans say, it would be like dollar bills lying on the sidewalk."

Alex Bowen, one of the Stern report authors, said: "[Pachauri's] is a defensible postion, not delusional. But I am more of a sceptic."

"My hunch overall is that it will be a little more costly than we estimated in 2006. But if well designed policies are put in place, we can still do it remarkably cheaply. And there is still no doubt that strong action now is much cheaper than no action," added Bowen, an economist at the Grantham Research Institute On Climate Change at the London School of Economics.

The associated benefits Pachauri pointed to include better energy security, protecting consumers from oil price spikes, new employment in green industries, more productive agriculture and lower air pollution, cutting health costs. He said one good example was insulating draughty homes and installing better energy control systems. "This can yield very high rates of returns, with pay back in one year."

The idea of co-benefits is also central to the "green new deals" promoted by the UN Environment programme, Lord Stern's group and others.

Bowen said: "Negative costs depends on assumption that policy design and implementation is sensible and very consistent across countries all over the world. But we have gone three years [since the Stern report] without global policies. Emissions have grown rapidly and a lot of people now think economic growth will be much higher later in the century." The faster you have to reduce emissions, he said, the more expensive it is likely to be.

Pachauri's comments came as he led discussions what the next set of reports from the IPCC should cover. Its last report in 2007 is acknowledged to have settled the argument over whether emissions from human activities were causing climate change.

In the next series, due in 2013, Pachauri said the focus would change. "The IPCC cannot address the issue in purely scientific terms. For adaptation and mitigation, we need to put euro or dollar values on those. But there are also some costs you can't quantify. For example, take Hurricane Katrina. You can put a value on property losses, what about psychological, sociological, and institutional costs. I would not like to try to quantify those."

The IPCC meeting raised a range of further issues that it believes need more attention, including extreme weather events, new greenhouse gases, the full impacts of aviation and global scale geo-engineering.

The reports take between five and seven years to complete, but Pachauri argued that this is their strength: "The IPCC process of regular peer review means the reports are far more defensible than anything else. Comments received are posted on our website as are actions."

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