[WestMALocals] new report on cost of global warming in prestigious scientific journal

[Nat Fortune]

< http://www.nature.com/nature/journal/v444/n7115/full/444006a.html >

Key take-home message: tackling climate change would cost 20 times  
less than doing nothing

NF

How much will it cost to save the world?

The Stern Review won't be the last word on the cost of global  
warming. But it has upped the stakes in the debate. Jim Giles reports.

He's a highly respected researcher and a former chief economist at  
the World Bank. He had a year and the help of more than 20 of  
Britain's brightest civil servants and academics. His work was  
commissioned by Gordon Brown, who controls Britain's budget and is  
likely to be the country's next prime minister. So could Nicholas  
Stern settle the debate about the economic impact of climate change?

No chance. The Stern Review on the Economics of Climate Change,  
released on 30 October, has been praised by many economists, who say  
it sets a new benchmark for quality and thoroughness. But its  
dramatic conclusions, including the claim that tackling climate  
change would cost 20 times less than doing nothing, were immediately  
attacked by right-wing commentators and other economists. Some add  
that the report covers such complex ground that it should be seen as  
a political rather than a scientific document (see Editorial, page  
2). Just as arguments about the validity of climate science are dying  
down, it seems that a new battle is looming over how much the world  
should spend to tackle climate change.

At first glance, Stern's review provides ammunition for those who  
advocate tough measures. Stern predicts that if greenhouse-gas  
emissions carry on as normal, between 5% and 20% could be wiped off  
the global gross domestic product (GDP) by the beginning of the next  
century. "This allows us to put a dollar number on the cost of  
climate change for the first time," says Philip Clapp at the National  
Environment Trust, a not-for-profit group in Washington DC.



Equally important, adds Clapp, Stern helps to counter campaigns by  
the oil and coal industries, which have highlighted the costs of  
tackling climate change. The review says that stabilizing greenhouse- 
gas concentrations at roughly double pre-industrial levels would cost  
a relatively paltry 1% of GDP, so it provides strong support for  
measures such as mandatory emission limits and public investment in  
green technologies. The key message is that acting now will cost far  
less than acting later.

The report has prompted some alarmist headlines, with one British  
newspaper declaring "Act now or the world we know will be lost  
forever". Yet the methodology used is first-rate, say supporters.  
Estimating costs over decades, and trying to factor in social and  
economic changes that will take place, is enormously tricky. But the  
report contains a comprehensive meta-analysis of existing studies on  
mitigation costs. It also includes new results from a model that  
builds on the handful of previous studies that have tried to  
calculate the impact on global GDP.

Inevitable criticism
The upper bound of 20% for loss of GDP, which is higher than previous  
estimates, is due to several factors. Stern generally uses low  
numbers for discount rates, the parameter used by economists to  
compare future and current costs. His team also considered a range of  
values for climate sensitivity — the global temperature rise caused  
by a given increase in greenhouse gas concentrations. Using a range  
leads to the higher upper limit for GDP reduction, but the results  
are more realistic.

"This is unquestionably head and shoulders above previous economic  
assessments," says Michael Grubb, an energy economist at Imperial  
College London, who contributed to the review. But others have homed  
in on the many assumptions that had to be made. Many right-wing  
commentators attacked the review on these grounds, some even starting  
work before publication. The use of one global development scenario,  
in which population reaches what demographers say is an unrealistic  
figure of 15 billion, attracted criticism.

Economists were also quick off the mark. In a four-page critique  
compiled within hours of the review's publication, economist Richard  
Tol of Princeton University accused Stern of selective reporting:  
"For water, agriculture, health and insurance, the Stern Review  
consistently selects the most pessimistic study in the literature."

On sea-level rise, for example, Tol says the review underplays the  
role of better coastal defences. Roger Pielke Jr, an expert in  
climate-change policy at the University of Colorado, Boulder, also  
accuses Stern of "cherry picking" alarming results from the  
literature on the link between natural disasters and climate change.

Such criticisms come as no surprise to Mike Hulme, director of the  
Tyndall Centre for Climate Change Research in Norwich, UK. Hulme says  
that the British government has asked him many times to conduct a  
study on the total cost of climate change. He declined, as he does  
not feel it's a question that researchers can answer. Difficulties in  
estimating the impact of strategies such as coastal defences are only  
part of the problem. When other assumptions, such as the economic  
cost of species extinctions, are included, Hulme feels that the  
uncertainties become so great that he would not be able to defend the  
end result.

He says that Stern's team seems to have done a good job, but with so  
many assumptions involved, and the review having been conducted by a  
political appointee: "This is not the last word of scientists and  
economists, it's the last word of civil servants."

Trillion-dollar questions
An academic involved in the Stern review, who did not want to be  
named as he was speaking on behalf of the team, told Nature that each  
assumption is based on the "sound principles of science and  
economics" and that the review spells out how the uncertainties  
affect the final result. He adds that the involvement of civil  
servants does not justify the "dangerous and incorrect" allegation  
that the report is politicized: "There was never any political  
pressure to produce high numbers."

The inevitable criticisms of the review need not reduce its impact.  
Negotiations over the future of the Kyoto Protocol are taking place  
this week (see 'Kyoto looks to the future'), and the review will  
strengthen the case of countries like Britain, which want tough  
limits on future emissions. Stern discusses several ways in which  
this could be done; one suggestion, that the current European Union  
emission-trading scheme be made global, was backed by Brown at the  
review's launch. Stern also notes that a substantial hike in public  
energy-research spending is needed, as market factors alone will not  
drive the development of technologies such as improved solar cells  
and biofuels that are needed to reduce emissions.

Stimulating debate over spending decisions, rather than putting a  
figure on the true costs of climate change, may be the review's main  
legacy. Although Hulme questions the assumptions behind the headline  
result, he has no doubt that Stern is broadly correct: "In a sense  
it's neither here nor there whether you believe the numbers. This  
will take the discourse away from the costs of taking action and put  
attention onto the costs of inaction."