Warming Called Threat To Global Economy
Tuesday, October 31, 2006
Failing to curb the impact of climate change could damage the global economy on the scale of the Great Depression or the world wars by spawning environmental devastation that could cost 5 to 20 percent of the world's annual gross domestic product, according to a report issued yesterday by the British government.
The report by Nicholas Stern, who heads Britain's Government Economic Service and formerly served as the World Bank's chief economist, calls for a new round of international collaboration to cut greenhouse gas emissions linked to global warming.
"There's still time to avoid the worst impacts of climate change, if we act now and act internationally," Stern said in a statement. "But the task is urgent. Delaying action, even by a decade or two, will take us into dangerous territory. We must not let this window of opportunity close."
Some economists questioned the British study's projections, however, saying they overestimated the impact of global warming on the world's economies, especially those of developed nations. At the same time, these critics said the report's assertion that it would cost only 1 percent annually of global GDP to curb climate change underestimated how much spending would be required.
"There's just a very small part of GDP" in industrialized nations "that's affected by weather in a direct or indirect way," said Jerry Taylor, a senior fellow at the libertarian Cato Institute, which accepts some contributions from fossil-fuel companies. "It's very difficult to sketch out this disaster scenario."
Yale University economics professor William Nordhaus, who has estimated that climate change will cost developed countries less than 1 percent of GDP over the next half-century, said the Stern report "appears to be an impressive effort to summarize the science and economics of climate change" despite the controversy surrounding its projections.
The report represents British Prime Minister Tony Blair's latest effort to enlist President Bush, a close ally, in his effort to make serious cuts in carbon dioxide emissions. Bush has declined to sign the 1997 Kyoto Protocol, which imposes mandatory reductions in greenhouse gases on most industrialized nations between 2008 and 2012, and yesterday his aides reiterated his commitment to fostering research and innovation rather than adopting federal emissions restrictions.
"The president has long recognized that climate change is a serious issue, and he has committed the U.S. to advancing and investing in the new technologies to help address this problem," said Kristen Hellmer, spokeswoman for Bush's top environmental adviser, James L. Connaughton. "His administration has already dedicated more than $29 billion to climate change sciences and technology programs and is working in strong partnership with nations around the world to accelerate progress. . . . The U.S. government has produced an abundance of economic analysis on the issue of climate change. The Stern report is another contribution to that effort."
In a telephone conference with reporters yesterday, Alex Brown, senior economic adviser for the Stern report, said the British government had conferred with Bush administration officials while drafting the study. But when asked whether these officials had indicated a willingness to shift course, Brown replied, "I don't think I can comment on that."
Still, several experts said the report could reshape the way policymakers consider the pros and cons of curbing carbon dioxide from power plants, automobiles and other sources.
"It's important for the people arguing for action to make the case that it's worth it, rather than the promise that it will be free," said Yale environmental law and policy professor Dan Esty, adding that the report puts "for the first time in stark relief, the costs and consequences of inaction and puts them on parallel with the known burdens of taking action.
The British government has also enlisted a prominent adviser to help promote its global warming message, by bringing on former vice president Al Gore as an unpaid consultant.
Even advocates of mandatory limits on greenhouse gases, however, said that to shift U.S. climate policy would entail policies that exact a price from politically influential and economically powerful industries.
"There are costs to addressing this problem," said Tim Profeta, who directs Duke University's Nicholas Institute for Environmental Policy Solutions. "This is only the beginning of the conversation."