Combating climate change can be economically beneficial

A major international report published last week could be a game changer in the fierce political debate about climate change in the United States.

The synthesis of “The New Climate Economy Report” was launched at the headquarters of the United Nations in New York on Sept. 16 and officially submitted to Secretary General Ban Ki-moon. Its key finding was that at least 50 percent of the reductions in greenhouse gases required to avoid dangerous climate change could be achieved through measures that have other additional economic benefits.

The report, which was produced by the Global Commission on the Economy and Climate, revealed that the 15 countries with the highest annual emissions of greenhouse gases lose the equivalent of 4.4 percent of gross domestic product (GDP) each year due to premature deaths caused by air pollution.

Based on an analysis of data collected by the World Health Organization, the report pointed out that the annual cost to the economy of the United States from deaths caused by exposure to tiny particles in the air is nearly 4 percent of GDP. Most of the particles, measuring less than 1/30th the width of a human hair, are produced by the burning of fossil fuels for power stations and vehicles.

{mosads}The report concluded that phasing out the use of fossil fuels would deliver substantial economic benefits for the United States, both in terms of reductions in risks from air pollution and climate change.

The health burden of local air pollution in China is even bigger, according to the report, costing more than 11 percent of GDP each year. In recognition of the enormous damage being caused, China announced last week that it would ban from next year imports and local sales of coal with high ash and sulphur contents.

The report also drew attention to the increased costs of sprawling cities, highlighting a study which noted Atlanta has about the same population as Barcelona, Spain, but has a built-up area that is 25 times larger. On average, urban sprawl increases the costs of providing utilities and public services by 10 to 30 percent or more, while longer travel times add a further 20 to 50 percent. The report recommended more policies to make cities compact with efficient public transport systems, not only to reduce greenhouse gas emissions, but also to reduce the drain on the economy from unnecessarily long and wasteful commutes by car.

The report is primarily aimed at heads of governments and finance ministers who still believe that it would be too costly to avoid dangerous levels of climate change.

An authoritative assessment published earlier this year by the Intergovernmental Panel on Climate Change (IPCC) concluded that the cuts in annual emissions of greenhouse gases required to have a two-in-three chance of avoiding dangerous global warming of more than 2 centigrade degrees would involve costs equivalent to 1.7 percent of global consumption by 2030.

That would be equivalent to reducing the rate of annual growth in consumption by just 0.06 percentage points.

However, the IPCC’s estimates did not take into account the numerous additional economic benefits presented in “The New Climate Economy Report.”

It is expected that the contents of the report will be noted by the 125 world leaders who are due to gather at the United Nations on Sept. 23 at a summit called by Ban Ki-moon to build support for a new international agreement on climate change.

The careful economic analysis was overseen by an international panel, chaired by former Mexican President Felipe Calderón, and included Annise Parker, the mayor of Houston, and Chad Holliday, chairman of Bank of America. Speaking at the launch, Holliday advised business leaders that “if you read this report, you will find more opportunities to maximize and risks to minimize than you will in any other place today.”

He added: “If you look at this report it says coal is a risk to be minimized and natural gas is an opportunity to be maximised.” Coal typically emits twice as much carbon dioxide as natural gas per unit of electricity generated when it is burned in power stations.

The report was jointly commissioned last year by the governments of Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden and the U.K. The work was carried out by a consortium of eight leading research institutions, led by Washington-based World Resources Institute (WRI). WRI will host, on Oct. 10, the launch of a report by the Global Commission on the Economy and Climate which is focused on the United States.

It is hoped that it will help to unlock the paralyzing stalemate in Congress over federal action to tackle climate change.

Ward is policy and communications director at the ESRC Centre for Climate Change Economics and Policy and the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science.