Extracts - climate change

A dwindling band of economists still question whether the benefits of doing something about climate change justify the costs in terms of foregone growth and poverty reduction, taking the view that future costs and harm are much less important than current costs. (This view ignores the possibility or impact of irreversible damage that cannot be meaningfully costed). The Stern Report effectively countered such arguments.

Technology is bound to play a central role in the transition to a low-carbon economy that drastically reduces reliance on fossil fuels for transport, agriculture, and energy production. Technology is seen by some as a form of ‘get out of jail free’ card that will allow both rich and poor countries to keep growing their market economies while simultaneously achieving the reductions in carbon emissions needed to avoid catastrophic climate change. But is this techno-optimism justified?

One possibility is a new technology that transforms the world’s reliance on carbon – for example, clean nuclear fusion that produces carbon-free energy. Nothing of that kind appears imminent, however, and even were such a technology to be discovered, it would take decades to commercialise and disseminate. With the global economy growing, and carbon emissions rising, the world cannot afford to wait any longer for such a painless technological fix to the problem.

Existing technology could in theory buy us some time, but only if the most advanced, cleanest techniques were rapidly to spread to all countries. If the whole world was able rapidly to become as carbon efficient (in terms of tonnes of carbon per unit GDP) as the more efficient, but not exceptional, developed countries Germany, Italy, Japan, UK, Switzerland), global carbon emissions would fall by some 43 per cent. That, together with existing technological trends (global carbon efficiency has improved by about 1.6 per cent per annum since 1975), would buy us about ten extra years in which to find a technological and development pathway that would allow us to cut global emissions by 80 per cent by 2050 compared to 1990 levels (the level of reductions required to minimise the risk of catastrophic climate change).

Such a wholesale switch to new and existing clean technologies would require a massive effort on a global scale, overriding intellectual property rules and short-term commercial self-interest, and backed by appropriate funding. It also ignores issues such as the rapidly rising use of air travel, which is becoming increasingly significant as a source of greenhouse gases, without any low-carbon alternative in sight. It may well be that patterns of consumption have to change as much as patterns of production. These are huge challenges, but the alternatives are equally unpalatable: cross your fingers and hope for some technological magic bullet to emerge, or accept lower global rates of growth in the market economy.

What if there is no technological fix, and a planned and publicly agreed rebalancing of growth fails to occur? Then, economic adjustments can only occur chaotically in a scramble for carbon based on brute force rather than reason. A complicating factor is the possibility that the world will hit ‘peak oil’ in the near future, leading to rapidly rising prices and further tensions over access to carbon reserves. While rising prices would help push the world towards cutting carbon emissions (indeed that is part of the reason behind carbon trading and carbon taxes), they are likely to be a disaster for equality. Take away political leadership, and any price-driven or even military struggle over resources between the world’s poor people and its gas-guzzling elites can have only one outcome – the exclusion of those without the power or wealth to gain access to carbon.

At a global level, a power struggle between carbon ‘haves’ and ‘have-nots’ could bring an abrupt end to the period of rapid global development that followed the end of colonialism. In its place we might see the fall of a ‘carbon curtain’ separating a wealthy, high-tech group of countries (or populations within countries), able to protect themselves from the ravages of climate change and control access to carbon, from poor countries and communities living through a new Dark Age, prone to increasingly erratic and devastating climate conditions, unable to afford the carbon needed to join the wealthy group.

These are apocalyptic thoughts, and environmentalists have been accused of crying wolf in the past, only to be proved wrong by new technologies and further discoveries of natural resource deposits. But as Jared Diamond’s book Collapse graphically shows, environmental damage, and the nature of society’s response to it, explain the sudden disappearance of some of history’s greatest civilisations. It should be remembered that in Aesop’s fable, the wolf did indeed attack the shepherd boy’s flock, and no one came to his aid.