Climate change

Subject: Climate change Wed Mar 31, 2010 4:15 pm

The following is an article about the supposed cost of climate change..... Does climate change really come with a cost?

By Fiona Wagner, Bankrate.com, March 23, 2010

The cost of climate change

The cost of cutting greenhouse gas emissions is high -- but the cost of inaction is even higher.

Developing and implementing effective climate change mitigation policy is a tricky business. While most people agree we'll have to move toward greater efficiency, using less energy and using cleaner energy sources, the debate in Canada over how to reduce greenhouse gas, or GHG, emissions often gets caught up in the costs.
According to the 2006 Stern Review on the Economics of Climate Change by British economist Nicholas Stern, the benefits of strong, early action considerably outweigh the costs. Not acting quickly enough could cost the world between five per cent and 20 per cent of GDP each year, while the cost of reducing emissions could be limited to approximately two per cent of global GDP per year.

Despite these projections, the Canada has taken a wait-and-see approach to cutting GHG emissions because of the cost. But experts say the cost of inaction will undoubtedly be higher than the cost of investing in the fight against global warming.
The costs
The International Energy Agency recently warned that while it will take an investment of US$10.5 trillion in low-carbon energy technologies by 2030 to keep average global warming temperatures to within two degrees (to avoid dangerous climate change), each year of delay in taking global action adds another US$500 billion to the bill.
But despite the fact that the Intergovernmental Panel on Climate Change, or IPCC, recommends that to avoid this two degrees warming, developed countries must cut GHG emissions by at least 25 per cent from 1990 levels by 2020 and that global GHG emissions need to peak by 2015, Canada has consistently taken a wait-and-see approach.

Speaking at the World Economic Forum in Davos, Switzerland, earlier this year, Prime Minister Stephen Harper said many short-term emissions goals can't be met without significant effects on economies -- both developed and developing -- and that the focus should be on innovative new technologies that could reduce emissions in the future.
And in February, Environment Minister Jim Prentice announced that Canada's emissions target under the Copenhagen Accord would now be a 17 per cent reduction in GHG emissions from 2005, in keeping with the United States as a means of "maximizing progress on reducing GHG emissions while maintaining economic competitiveness and prosperity."

This is, in fact, weaker than our legally binding Kyoto target (six per cent below 1990 levels by 2012) and Harper's first target of 20 per cent below 2005 levels by 2020.
The time for action is now
But as the provinces, federal government, industry and environmentalists spend years arguing over how to implement effective policy, emissions keep rising.
"There's a lot of scientific and economic evidence that points in the direction of actually taking this pretty seriously and taking action as urgently as possible, and yet we have stasis in Canada," says Dale Marshall, climate change policy analyst with the David Suzuki By Fiona Wagner, Bankrate.com, March 23, 2010

"Part of the rationale is that it's a long-term problem that requires a long-term response, and if we do anything urgently now, it'll damage the economy," says PJ Partington, a climate policy analyst with the Pembina Institute. "Of course it's a long-term problem and it takes a long-term approach and that's something that's difficult to do in short-term politics, but we have to start now."
A common approach is needed
Economists, policy analysts and environmentalists worldwide agree that carbon pricing (putting a price tag on GHG pollution through a cap-and-trade system or carbon tax) is the key to achieving needed emissions reductions. By making it more expensive to pollute, clean technology innovations such as wind and/or solar power generation become more cost-effective and competitive.

thout it, Canada's GHG emissions will continue growing, mostly as a result of natural resource development and economic growth.

One report, "Climate Leadership, Economic Prosperity," recently released by the David Suzuki Foundation and Pembina Institute, looked at what policies would be needed to cut GHG emissions below the old government target of 20 per cent below 2006 levels by 2020 and cut GHG emissions by 25 per cent to 40 per cent by 2020 (the IPCC recommendation).
Key findings of the report found that by putting a hefty price on GHG emissions and implementing complementary regulations and public investments, Canada could meet the IPCC recommendations, and GDP would still grow 23 per cent between 2010 and 2020 versus 27 per cent under business-as-usual conditions that see emissions rising to 47 per cent above the 1990 level. What's more, Canada's total number of jobs would rise by 11 per cent while meeting either target.

Here's the catch: Due to the fact that the majority of Canada's GHG emissions come from the west, home to 70 per cent of the country's oil production and one-third of its greenhouse gases, Alberta and Saskatchewan would take a hit on projected growth rates.
The response to the report's findings was electric, even though the report shows that Alberta's GDP would still be higher than any other region and Saskatchewan would be close to the Canadian average. Prentice called the findings "irresponsible" and reaffirmed that Canada could meet its targets by harmonizing with the Americans' yet-unfinalized plan. Alberta Premier Ed Stelmach denounced the report's recommendations as a "wealth transfer to other parts of the country," and Saskatchewan Energy Minister Bill Boyd said that technology (such as carbon capture and storage) is the key to combating climate change.
Pricing policies must consider regional equity
It's clear that the challenges to implementing effective climate change policy are immense, especially when faced with reducing emissions in certain sectors in a country with an uneven regional distribution of natural resources and powerful energy-intensive industries. There's also difficulty in reconciling federal and provincial policy initiatives all while maintaining Canada's competitiveness.

"The key thing to see (in this report) is that impacts are widely varying by region and by sector," says Chris Bataille, director of MK Jaccard and Associates, the economic modeling firm commissioned for this report. "Meeting those kinds of targets is possible, (but) we're going to have to put some fairly stringent regulations on the oil and gas industries, which could potentially have adverse effects on Alberta and Saskatchewan unless you design a policy to mitigate those impacts."
That's why it's critical for any pricing policy to consider regional equity, he says. But it can be done.
"There are tremendous economics risks from climate change that have to be managed, and there's a potential for economic growth and innovation that comes from strong action," adds Partington. "The question isn't whether we can afford to tackle climate change, as it would be incredibly unaffordable not to. The question is: What are the best policies to do it cost effectively and as early as possible?"
Fiona Wagner is a freelance writer living in Hastings County, Ont.