Climate change is an economic crisis
by Laurence Lewis, Daily Kos, October 17, 2010
The compelling case that climate change is occurring and is caused in large part by human activities is based on a strong, credible body of evidence, says Advancing the Science of Climate Change, one of the new reports. While noting that there is always more to learn and that the scientific process is never "closed," the report emphasizes that multiple lines of evidence support scientific understanding of climate change. The core phenomenon, scientific questions, and hypotheses have been examined thoroughly and have stood firm in the face of serious debate and careful evaluation of alternative explanations."Climate change is occurring, is caused largely by human activities, and poses significant risks for — and in many cases is already affecting — a broad range of human and natural systems," the report concludes. It calls for a new era of climate change science where an emphasis is placed on "fundamental, use-inspired" research, which not only improves understanding of the causes and consequences of climate change but also is useful to decision makers at the local, regional, national, and international levels acting to limit and adapt to climate change. Seven cross-cutting research themes are identified to support this more comprehensive and integrative scientific enterprise.
A carbon-pricing system is the most cost-effective way to reduce emissions. Either cap-and-trade, a system of taxing emissions, or a combination of the two could provide the needed incentives. While the report does not specifically recommend a cap-and-trade system, it notes that cap-and-trade is generally more compatible with the concept of an emissions budget.
TEMPERATURE# Carbon emissions have already pushed up global temperatures by 0.5 °C# If no action is taken on emissions, there is more than a 75% chance of global temperatures rising between 2 and 3 °C over the next 50 years# There is a 50% chance that average global temperatures could rise by 5 °CENVIRONMENTAL IMPACT# Melting glaciers will increase flood risk# Crop yields will decline, particularly in Africa# Rising sea levels could leave 200 million people permanently displaced# Up to 40% of species could face extinction# There will be more examples of extreme weather patterns
# Extreme weather could reduce global gross domestic product (GDP) by up to 1%# A 2-3 °C rise in temperatures could reduce global economic output by 3%# If temperatures rise by 5 °C, up to 10% of global output could be lost. The poorest countries would lose more than 10% of their output# In the worst case scenario global consumption per head would fall 20%# To stabilise at manageable levels, emissions would need to stabilise in the next 20 years and fall between 1% and 3% after that. This would cost 1% of GDP
Lord Stern of Brentford made headlines in 2006 with a report that said countries needed to spend 1% of their GDP to stop greenhouse gases rising to dangerous levels. Failure to do this would lead to damage costing much more, the report warned -- at least 5% and perhaps more than 20% of global GDP.But speaking yesterday in London, Stern said evidence that climate change was happening faster than had been previously thought meant that emissions needed to be reduced even more sharply.This meant the concentration of greenhouse gases in the atmosphere would have to be kept below 500 parts per million, said Stern. In 2006, he set a figure of 450-550 ppm. "I now think the appropriate thing would be in the middle of that range," he said. "To get below 500ppm ... would cost around 2% of GDP."
In the West and Northwest, climate change is expected to alter precipitation patterns and snow pack, thereby increasing the risk of forest fires. Forest fires cost billions of dollars to suppress, and can result in significant loss of property. The Oakland, California fire of 1991 and the fires in San Diego and San Bernardino Counties in 2003 each cost over $2 billion. Every year for the past four years, over 7 million acres of forests in the National Forest System have burned with annual suppression costs of $1.3 billion or more.The Great Plains and the Midwest will suffer particularly from increased frequency and severity of flooding and drought events, causing billions of dollars in damages to crops and property. For example, the North Dakota Red River floods in 1997 caused $1 billion in agricultural production losses, and the Midwest floods of 1993 inflicted $6-8 billion in damages to farmers alone. The Northeast and Mid-Atlantic region will see increased vulnerability to sea level rise and storms. Depending on the category of the event, evacuation costs for the Northeast region may range, for a single event, between $2 and $6.5 billion. Since 1980, there have been 70 natural weather-caused disasters, with damages to coastal infrastructure exceeding $1 billion per event. Taken together, their combined impact surpassed $560 billion in damages.Decreased precipitation levels in the South and Southwest will strain water resources for agriculture, industry and households. For the agriculturally productive Central Valley in California alone, the estimated economy-wide loss during the driest years is predicted to be around $6 billion per year. Net agricultural income for the San Antonio Texas Edwards Aquifer region is predicted to decline by 16-29% by 2030 and by 30-45% by 2090 because of competing uses for an increasingly scarce resource – water.The true economic impact of climate change is fraught with “hidden” costs. Besides the replacement value of infrastructure, for example, there are real costs of re-routing traffic, workdays and productivity lost, provision of temporary shelter and supplies, potential relocation and retraining costs, and others. Likewise, the increased levels of uncertainty and risk, brought about by climate change, impose new costs on the insurance, banking, and investment industries, as well as complicate the planning processes for the agricultural and manufacturing sectors and for public works projects.