THE MOST valuable present that Tony Blair could make to his fellow-summiteers at Gleneagles would be the rigorous and persuasive report on the economics of climate change published today by the Economic Affairs Committee of the House of Lords. He is unlikely to do so, for two main reasons. The first is that the report unanswerably demonstrates not only that in terms of averting or even delaying global warming, the Kyoto Protocol is about as futile as sending seven maids with seven mops to rid a beach of sand, but that “more of the same”, a “Kyoto-plus” treaty that sets tougher emissions targets, would fail too, because the whole approach it embodies is fatally flawed.
The second reason would be embarrassment. In compelling detail, the report shows that, rather than setting an admirable example of innovation and effectiveness, Britain’s own climate change strategy is a shambles based on “dubious” assumptions, vague, “wildly optimistic” estimates of costs — and a politically correct approach so dominated “by certain renewable technology interests” that the “big” future technologies, such as hydrogen power, are being neglected in favour of an obsession with wind power.
The Government has not the foggiest notion what Britain’s self-imposed and hugely ambitious target of cutting C0² emissions to 60 per cent of 1990 levels by 2050 will cost. The estimates range from anywhere between £60 and £400 billion in today’s money — and the lower figure assumes, totally implausibly, that costs up to 2020 will be negligible because the emissions targets can be met merely through more efficient use of energy.
Gordon Brown has correctly observed that finance ministries need to be involved as deeply in climate change policy as are environmental departments. Yet in Britain, Defra rules OK; and the approach of the Department for Environment, Food and Rural Affairs is that the anticipated reduction in UK growth rates is trivial, by comparison with the (presumed) returns in reduced environmental risk. As the committee observes, “no other item of government expenditure is treated in this way. If it were, it would be easy to justify almost any large scale item.” The Treasury has not even done an overall cost-benefit analysis of the returns to be expected from the emissions-reduction strategy — and because Britain’s emissions are a minute fraction of the global total, the truthful answer would be high cost for zero benefit, should other countries not follow “the British lead”. No wonder the report calls for a complete overhaul of government policy.
Mr Blair should, however, swallow hard and push this report as hard as he can into the international domain, because it poses questions of the first magnitude about the faulty and, in some cases seriously misleading economic “scenarios”, produced by the UN’s Intergovernmental Panel on Climate Change (IPPC), on which not only Britain’s but other countries’ policies are being based. The committee accepts that the uncertainties that still surround the science of global warming do not constitute a justification for doing nothing; “the issue is how to behave in the face of that uncertainty”, and it must be right to take out insurance against the worst risks. But not “at any cost” — particularly when the estimates of the impact of global warming vary enormously, are even more highly speculative than the science of climate change and may heavily overestimate the damage, particularly when some parts of the world would actually benefit from a warmer climate — something that the IPPC has consistently underplayed.
The major point this report makes is that the links between economic growth and global warming have “not been sufficiently rigorously explored”. Put less gently, some of the IPPC “scenarios” — including the ones that predict global warming in excess of 5C — are based on fantasy.
Climate change modelling involves combining scientific data, observed and projected through models, with economic forecasts. Assumptions about per capita emissions of greenhouse gases, for example, are critically affected by things such as the future size of the world’s population, global growth rates, energy efficiency, and the prospects of developing new technologies that reduce future reliance on fossil fuels. The IPPC’s “high end scenarios” assume not only that carbon and methane emissions rise steeply, when they are currently stable or actually shrinking, but artificially inflate the magnitude of global warming by assuming that the world’s population will be half as large again 2100 as it is expected to be. The IPPC also consistently factors in global growth rates that are far higher than those historically recorded.
These “worst-case scenarios” are constantly cited, erroneously, as forecast, and they are seriously distorting policy. It is urgent to arrive at more realistic estimates, to be clearer about the trade-offs involved and to be more honest about the high costs that generations now living will asked to bear, for benefits that lie far in the future.
More thought, the report says, also needs to be given to the merits of adapting to climate change, given that some measure of global warming is unavoidable. Adaptation is “the Cinderella” of climate change policy. “Nearly all of the public debate . . . is about mitigation — reducing emissions — rather than about . . . assisting the most vulnerable societies in the world to adapt to the risk they may face.” With or without global warming, for example, water scarcity may affect as many as six billion people by 2080.
How might governments get themselves off the Kyoto hook? By focusing on incentives rather than imposed targets. The goal should be to make carbon-free energy economically viable, and that will require heavy investment in such technologies as solar photovoltaics, carbon sequestration and hydrogen technology. Governments need to get away from targets and penalties, and concentrate on maximising the potential of research. Because this is what the Bush Administration has been saying, the Gleneagles summiteers will not want to admit that Kyoto is a bankrupt strategy. But the issue is too important for pride to trump common sense.
