The final week of October saw the publication of the first major study on the economic impacts of climate change – compiled by an economist, rather than an environmentalist or scientist. The report, written by Sir Nicholas Stern, a former chief economist of the World Bank, argues that climate change impacts could shrink the global economy by 20%, and that in economic terms alone it is imperative to take swift and wholehearted actions to cut carbon emissions and limit the effects of global warming. If no action is taken to reduce emissions, the chance that global temperatures will rise by 2à‚°- 3à‚°C in the coming 50 years is greater than 75%. Yet such a temperature rise could reduce global economic output by 3%. It could displace up to 200 million people through floods and cause water shortages for a sixth of the world’s population – which in turn could create tens or hundreds of millions of ‘climate refugees’.
The Stern Review – which was commissioned by Britain’s Chancellor Gordon Brown – makes compelling arguments for speedy and committed international actions to reduce carbon emissions. It argues that 1% of global gross domestic product (GDP) must be spent on tackling climate change immediately. As British Prime Minister Tony Blair commented: ‘For every à‚£1 invested now we can save à‚£5, or possibly more, by acting now.’
Sir Nicholas said in a BBC interview: ‘What we have shown is the magnitude of these risks is very large and has to be taken into account in the kind of investments the world makes today and the consumption patterns it has.’ Actions recommended by the Stern Review include reducing consumer demand for heavily polluting goods and services, preventing deforestation, and extending the European Emissions Trading Scheme globally, to include countries such as the US, China and India.
More immediately relevant, for COSPP readers, are the Review’s recommendation that investments be made to improve the efficiency of the global energy supply, and to promote cleaner energy and transport technologies – with non-fossil fuels accounting for 60% of energy output by 2050.
The energy efficiency measures called for in the Stern Review are precisely those offered by the technologies and approaches covered in COSPP. The Review estimates that 14% of global emissions come from the industry sector, and 24% from power generation. The use of combined heat and power in industry increases dramatically the energy derived from fossil fuels (and use of biomass can often be an option). When power generation goes hand-in-hand with district heating and cooling, again fuel efficiency is increased and the need for heating or cooling from another fuel source is avoided. And generating power flexibly, on-site, cuts down on losses that take place in transmission, but also helps prevent peaking demand which may often require a utility’s oldest, least efficient, generation to come onstream.
There’s no need to wait for a new ‘miracle’ technology – it’s here already. The Stern Review stresses that what is important is to invest – now – in existing low-carbon energy technologies.
EDITORIAL DIRECTOR, COSPP
P.S. All new COSPP articles are now available on our website, www.cospp.com. Here you can also subscribe to the print version or our new electronic version, change your subscription details, or sign up for our e-newsletter.