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Beyond the IPCC headlines: act now on climate change or pay a heavy price

Written by Ilmi Granoff

The good news from IPCC Working Group III’s 5th Assessment Report on climate change mitigation is that the window for economic, technically feasible, and effective climate change mitigation is still openHigh-, middle- and low-income economies must each now take steps to put the globe on a path for something in the range of 2º Celsius, avoiding climate change’s most dangerous risks.  The bad news is that the window is closing. The assessment concludes we have about fifteen years to re-gear our economies and avoid climate change’s worst effects. 

The headlines have focused on the particular conclusion that we need a “massive shift” in how we generate and use energy globally.   But to what extent is this achievable? It may be helpful to think of it as two discrete endeavours:

  • Steps necessary to reduce emissions now; and
  • Steps that set us up for reduced future emissions: also necessary, also for now.

This division is particularly important from a development perspective, since both require different actions from high income countries like the US and UK, middle-income countries like China and India, and low-income countries like Liberia and Nepal.

Identifying the priorities

To undertake a global massive shift in current energy emissions, the following stand out from the assessment as priorities (categories of countries for action are my own, and do not necessarily reflect the party responsible for financing this massive shift):

  • High- and middle-income economies must confront fossil fuel energy use head-on, especially replacing coal with cleaner sources of electricity generation. This will require government action in the US and Europe, but also countries like India and China, where the greatest emissions increases have taken place over the last decade. It will sting economically, but the real pain holding us back is political. The oil, gas and coal industry has spent billions of dollars on lobbying in the US alone and ODI research shows global fossil fuel subsidies reach half a trillion dollars. The public has also simply not come to terms with what, for example, slight energy price increases will buy them and their children.
  • High- and middle-income economies must improve industrial and consumer energy efficiency and high-income economies must reduce energy demand. The IPCC report concludes headway can be made by moving industry from current common to best practices.  Changes to consumer practices will require changes in how consumer goods are designed (for example, cars), and also require influencing consumer choices themselves. Each of these will require a combination of better information, incentives and, yes, regulation.

To undertake a global massive shift in future energy emissions, the following stand out:

  • All economies need to re-think the next wave of infrastructure choices and make new ones low-carbon. New electricity infrastructure will need to prepare for more renewable energy generation in the mix.  City planning should create modal shifts away from un-needed travel and cars. New buildings will need to be built based on state-of-the-art efficiency technology and policy, which is already available. Many of the lowest hanging fruit for new infrastructure is in low- and middle-income countries, where lack of infrastructure means that future development could avoid “lock-in” and be built more sustainably in the first place. For ethical and practical reasons, this ‘leapfrogging’ will require a huge commitment from high-income countries.
  • High-income economies need to invest in technological innovation for future emissions reductions. We may have the technology to avoid a massive emissions peak mid-century, but we don’t yet have the technology to reach the critical long-term goal of zero net emissions by the century’s end.  Government spending to promote technological innovation in areas such as carbon dioxide capture and storage and energy storage will by-far pay for itself in societal benefits.

But what will this cost the economy?

The third IPCC report is primarily an economic analysis, so it has some answers. If the global economy grows by somewhere between 300-900% by 2100, as experts expect, a sensible mitigation strategy undertaken now will cost about 5% of global consumption in the aggregate by 2100 (or, more accurately, a range between 2.9-11% drawing from multiple models). There has been much controversy around this number, but in many ways the important aspect is the order of magnitude between the consumption cost of mitigation (small number) and global economic growth over the same period (very large number). Even the upper end of estimates is a real but manageable amount, which presumes significant net growth in the next century, and does not even taken into account the avoided costs from climate change or things like air pollution reduction from phasing out coal. 

But this is only the cost now. 

Wait 15 years, and the cost of rapidly redirecting the economy from 2030-2050 increases massively. 

Assume we emit no more per year by 2030 than we do now but wait until then to make emissions cuts, and the cost increases by about 28%.

Assume we increase our annual emissions (as we are currently doing), and the cost increase is on the order of 48%. If we wait long enough, both climate sceptics and scientists will be right: we will wreck the economy if we try to mitigate emissions, and the worst effects of climate change will also likely happen.

On a Sunday BBC radio interview a few hours before the IPCC report launched, I used the metaphor that climate action is like buying a train ticket in the UK.  You begin planning a week out for a trip you know you need to take, but you just don’t get around to buying the ticket.  It’s not a big price but it’s not free, so you procrastinate… until an hour before the trip… and it costs four times as much.

As IPCC chairman Rajendra Pachauri stated at the report’s press conference: “The high-speed mitigation train would need to leave the station soon and all of global society will have to get on board”. The ticket price to board Pachauri’s “high-speed mitigation train” is steadily climbing, so when do we accept this journey is happening and get our ticket?