Key Note presentation by Vicente Barros , Co-c...

Key Note presentation by Vicente Barros , Co-chair of Working Group II, Intergovernmental Panel on Climate Change (IPCC) (Photo credit: Citt)

Government commitment to funding policies on climate chamge are driven by economic and fiscal forecasts and as such the policy advisors on climate change tend to deliver policy proposals that can be funded within strict achievable fiscal constraints. As such they tend to opt for the optimistic trends rather than delivering proposals based on the actual data available to them. We see this conclusively in both the Stern and IPCC report and freely admitted to by contributing scientists.

and yet, even the worst case IPCC trajectory falls short of that supported again by the actual data !

The next report from the IPCC is due soon, and it will not make for easy reading …

Consequently,, the financial resourcing amounts to as little as approximately 1% of GDP, where infact, if we based it on more realistic data to achieve the 2050 targets it should more likely to be nearer 2% of GDP – that’s close to the estimated annual cost to the UK Treasury By 2050 (assuming the target of 550ppm CO2 has been met and whilst assuming positive annual economic growth (of circa 2%) – well guys last time i checked the economy had stalled !.

Newtz calculations (based on 2010 figures)

Using DECC’s own capital costs across all sectors including – Fossil Fuels, Bioenergy, Electricity, Buildings, Transport, Industry

(Not allowing for discounting or finance costs – and assuming we hold onto AAA status)

High Estimate (Capital spend) £135b.  = 8.4% of GDP

Low Estimate (Capital spend) £90b = 5.6% of GDP

Something is’nt adding up ! – we are falling well short of funding to mitigate Climate Change !
Looking further, thee global emission of greenhouse gasses imposes costs on others that are not borne by the major emitters and these costs will be felt over a long time period by all nations regardless of contribution to emissions ……. Note: this issue is currently being addressed at the Doha conference, and there may be signs of a breakthough …. we shall see !
The exact nature of costs remains uncertain however, one certainty is that those most affected are future generations and they cannot speak up for their interests.

Taking urgent action makes good economics – delaying is dangerous and costly

The cost of cutting emissions consistent with a target of 550ppm CO2 stabilisation trajectory averages 1% of GDP per year.

cost of CC

This graph illustrates the scale of action required. A very wide range of models  suggest that cutting emissions to adopt a stabilisation trajectory at 550ppm will cost 1% of GDP per year.  Again, that finding was corroborated by the IPCC report on mitigation.  It is manageable, and importantly, it means we can grow and be green.  Delaying emissions reduction significantly constrains the opportunities to achieve lower stabilisation in the future.

In fact, comparing this to the potential costs of doing nothing, it is the other way round – if we don’t tackle climate change we will reduce growth and development.

The real costs of Climate Change

Analysis has shown that mitigation of climate change will result in a loss of 5% average per capita GDP ‘now and forever’, but these costs are not evenly distributed

Developing nations will pay higher price:

  • Sub-Sahara Africa (high non-market costs)
  • India & Southeast Asia (9-13% loss in GDP)
  • What of the poorest nations ? ….

Developed nations will vary depending upon geography, for instance the US  will potentially get off more lightly with only 1-1.2% loss in GDP.

And what of the other costs:

If these factors are taken into account, total costs are potentially as high as 20% of world GDP
Then there’s the cost of delay ….. what price the loss of civilisation !
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