| October 30, 2006 |  |
Unchecked Global Warming a Massive Threat to US and Global Economies
Unchecked Global Warming a Massive Threat to US and Global Economies
WASHINGTON—A major new report on the economics of climate change released today has the potential to alter the terms of the US global warming debate, according to the Union of Concerned Scientists. The report, prepared for the British government by Sir Nicholas Stern, a former Chief Economist and Vice-President of the World Bank, concludes that the world economy faces the threat of a massive economic depression if urgent action is not taken to limit the damaging impacts of unconstrained global warming.
The report also demonstrates that the costs of reducing emissions of the heat-trapping gases that are causing climate change are much more modest than some claim. While the economic cost of global warming could be as much as 20 percent of world gross domestic product (GDP) each year, an investment of just one percent of annual GDP by 2050 could reduce emissions significantly and head off the worst projected impacts of climate change. The report looks at the net present value of implementing strong mitigation policies and finds that the benefits of such action exceed the costs by $2.5 trillion annually.
"The Stern report exposes the bankruptcy of the arguments of President Bush and some in Congress and industry that taking action on global warming will hurt the economy," said Alden Meyer, Director of Strategy and Policy at the Union of Concerned Scientists. "In fact, just the opposite is true - it's the refusal to take serious action that poses the true risk to our future economic prosperity."
The Stern report is the most comprehensive review to date of the economics of climate change, and uses an integrated assessment model to estimate damages from climate change-induced impacts such as sea level rise, droughts, floods, health effects and species extinction. It finds that, while the poorest countries will be hit hardest and first, developed countries are far from immune to the risks of climate change. Adaptation measures alone in industrialized countries could cost as much as $150 billion a year with one-third of these costs borne by the U.S. The report also says it is incumbent on richer countries to help poorer countries with adaptation measures that are likely to cost tens of billions of dollars a year. There is a very small 10 to 20-year window of opportunity to act. The dangers posed by potential abrupt climate change (such as disruption of ocean currents or the melting of the Greenland ice sheet) only compound these serious economic threats and could occur too swiftly for humans to adapt.
"Global warming is a threat to our economy every bit as serious as the budget and trade deficits, and any delay in action is costly," said UCS Climate Economist Rachel Cleetus. "The good news is that this report confirms that there are practical, cost-effective solutions to reduce emissions and safeguard our future economic well-being."
The report strongly supports the use of market mechanisms, such as carbon credit trading, to set a price for emissions of carbon dioxide and other heat-trapping gases. It also calls for greatly expanding research and development of new low carbon technologies and beefing up incentives for rapid deployment of existing clean technologies. "There is an increasingly robust market for low-carbon technologies that opens up a whole new area of economic opportunity for companies - and countries - that take the lead," said Columbia Business School professor Geoffrey Heal, a member of UCS's Board of Directors. "By taking a head-in-the-sand approach to the threat of global warming, our national leaders are jeopardizing the ability of American companies to compete in this growing market." According to the report, the market for green technologies could be worth at least $500 billion per year by 2050 - and perhaps much more.
The report acknowledges that marshalling the political will to take action on climate change is no small task and will require global cooperation on an unprecedented scale. But the bottom line is clear: the investments required to avert serious damage are relatively small compared to the staggering costs of inaction.
The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.
