Hypersonic

The internationally respected British economist, Sir Nicholas Stern, has warned the world's climate change will cost £3.68 trillion if the world fails to do something about greenhouse gas emissions immediately. He predicts the world could suffer a global economic crisis like the great depression of the 1930s.

£3.68 trillion: The price of failing to act on climate change

Landmark report reveals apocalyptic cost of global warming
Gaby Hinsliff, political editor
Sunday October 29, 2006
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Britons face the prospect of a welter of new green taxes to tackle climate change, as the most authoritative report on global warming warns it will cost the world up to £3.68 trillion unless it is tackled within a decade.
The review by Sir Nicholas Stern, commissioned by the Chancellor of the Exchequer and published tomorrow, marks a crucial point in the debate by underlining how failure to act would trigger a catastrophic global recession. Unchecked climate change would turn 200 million people into refugees, the largest migration in modern history, as their homes succumbed to drought or flood.
Stern also warns that a successor to the Kyoto agreement on cutting greenhouse gas emissions should be signed next year, not by 2010/11 as planned. He forecasts that the world needs to spend 1 per cent of global GDP - equivalent to about £184bn - dealing with climate change now, or face a bill between five and 20 times higher for damage caused by letting it continue. Unchecked climate change could thus cost as much as £566 for every man, woman and child now on the planet - roughly 6.5 billion people.
The 700-page report argues that an international framework on climate change covering the globe will be necessary, and that different countries may opt to reduce emissions differently. Options range from many more green taxes to carbon trading.
Stern's verdict will create fierce political debate, with a growing belief in government that taxes on activities such as driving or flying will have to rise.
A leaked letter from the Environment Secretary, David Miliband, to the Chancellor, in the Mail on Sunday, proposes a range of 'green' tax increases.
Stephen Byers, the former cabinet minister and member of an expert panel of international politicians on climate change, is meanwhile urging new taxes to help change behaviour, including a 'global warming premium' on exotic fruit, vegetables and flowers flown thousands of miles across the world.
'There will need to be a global response [to Stern], but it must also filter down to change at domestic level,' he told an audience of businessmen in China this weekend. 'For the Labour party there must be no no-go areas for policy debate. The politics of taxation is changing and we need to be leading the debate, not playing catch-up. We should consider how we can change the structure of our tax system in a way which benefits the lowest-paid and penalises environmentally damaging activity.'
Byers is the first of several senior Labour figures expected to go public over green taxes, reflecting views within Downing Street that the public now fears climate change sufficiently to pay more for gas-guzzling activities. Charles Clarke, the former Home Secretary, is expected to join the debate, while Alan Milburn raised the issue in a recent speech. Such interventions will irritate the Chancellor, who regards taxation as his turf, particularly in advance of his autumn pre-budget report.
Air freight is one of the most lightly taxed areas of transport since aviation fuel is tax-free and there are no passengers to pay duty. Yet green campaigners say the planet can ill afford the thousands of 'food miles' travelled by exotic produce. One kilo of kiwi fruit flown from New Zealand to Europe discharges 5kg of carbon into the atmosphere. Other options include hiking car tax on fuel-inefficient vehicles and cutting stamp duty on the purchase of energy-efficient houses. Byers will argue tax rises should be offset by cuts elsewhere.
The Stern report will advocate extending the European 'cap and trade' system - under which carbon emissions are capped at a certain level, with businesses which need to emit more forced to buy spare emissions quotas from low-polluting businesses around the world, encouraging industry to find cleaner and cheaper ways of operating.
He will also urge a doubling of investment in energy research and a speedier Kyoto process - meaning that negotiations with the US will have to be undertaken while George Bush is still president. International governments had hoped to deal with a more sympathetic successor after 2008.
Downing Street and the Treasury believe that the report marks a decisive moment in international politics. Stern's is the first heavyweight contribution by an economist rather than a scientist and senior officials believe he will make what might seem a hopelessly ambitious timetable credible. 'This will give us an argument to make,' said a Whitehall source. 'I think we are at a tipping point in terms of the debate, as we were at a tipping point in 2004/05 in terms of the science.'
Stern's forecast cost of 1 per cent of global GDP is roughly the same amount as is spent worldwide on advertising, and half what the World Bank estimates a full-blown flu pandemic would cost. Without early intervention, he estimates the cost would be 5-20 per cent of GDP, some paid by governments, some by the private sector. But he stresses that unilateral action will not be enough - if Britain shut down all its power stations tomorrow, the reduction in global emissions would be cancelled out within 13 months by rising emissions from China.
Stern will advocate new funds to help Africa and developing nations adapt, but will argue the key challenge is from emerging nations such as China and India. Emissions from China are nearly level with the US and likely to increase as the Chinese get more cars and electrical goods - up to 30 million households are likely to get digital TVs alone in the next few years. Britain will push this week for more energy-efficient consumer goods.
The Tory environment spokesman, Peter Ainsworth, who has argued green tax should rise as a proportion of overall taxation, said he hoped the Stern report 'spurs the government into being much more proactive than it has been'.
Britain's share of revenue from green taxes is lower now than in 1994, partly because of the freezing of petrol duty after fuel protests. Green taxes are controversial because if they do change behaviour, tax income falls, emptying Treasury coffers. But supporters argue that, over time, the tax system could be shifted back towards more personal taxation.

Curb Zone

 

Mirage77

Has anyone here watched The Inconvenient Truth? It's a very good movie by Al Gore... If he had won the election, the US would be a much more environmentally-friendly place now.

The US is just one of two developed nations in the world that did not rectify the Kyoto Protocol - the other is Australia.

Germaniac

Yeah I watched it - very good, if a little stretched in some places... and I think you mean 'ratify'


For the last couple of months (until two weeks ago) I worked for a fundraising company where I campaigned for, amongst others, the Australian Conservation Foundation, who (obviously amongst other environmental issues) is fighting strongly the global warming front. The more you learn about global warming the more scary it becomes - all other environmental, social, ethical, economic, moral or world problems pale into insignificance when you consider the quite real possibility of polar ice caps melting, whole ecosystems getting wiped out, and the rest.... it's HUGE!! Things like..... millions of people without food, reefs (such as the Great Barrier Reef) completely destroyed (due to bleaching, rising water temperatures), crops failing, droughts occurring more regularly, cyclings occurring more regularly, rainfall decreasing, whole animal and plant species becoming extinct... the thing is it's not dooms day-ists or enviro-freaks saying these things, it's a large majority of the scientific community.

In fact I think one of the strongest points Al Gore made, not sure if it's entirely true or not, but basically they took samples of something like 1000 scientific journals on the subject, and samples of 1000 of the population, and it was crazy: 100% of scientists said that mankind was directly contributing to the effects of global warming, while the population was (if I remember) evenly split on the issue - most were unsure - Gore saying this was a product of the PR instrument of doubt.

There is an absolutely fantastic interview of Al Gore on the Andrew Denton show Enough Rope I recommend to all interested -
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(it's in four parts, that's part one)

I love where he says that people go from denial to despair without stopping in the middle to figure that we may actually be able to do something about it - and that the common elements of both denial and despair is that they both justify inaction... but I think scientists also agree that with steps like the Kyoto Protocol man's input into global warming can be reversed... I know it's rather inspirational and sappy but one of the lines I heard once from another campaigner when replying to someone who said "but there's nothing we can do, people and governments will never change!!!" was that "people said that about slavery, about Apartheid, about plastic bags, but look at what's happened!!" (regarding plastic bags, quite amazingly in recent years in Australia there's been a big clean-up act on the part of the major supermarkets and many retailers to move away from the use of disposable plastic bags, replacing them with reuseable, more sturdy ones... it's enjoyed great success) -- I think it's scary, but I think something can, and is, and will, be done. Just recently there was a newspaper article suggesting the Howard government (traditionally very pro-industry, anti-Kyoto) is shifting towards a more environmental stance - good signs.

Michael

Wow. Good post Rob, however, I can't agree with everything.

The main issue here is going about raising taxes and I think that is going to be something very hard to do in many of these western countries. Not only will it be hard, but harder because of the fact that it concerns Global Warming issues.

Carbon trading is mentioned pretty early in this paper, and I was expecting it. I laughed when I saw it becuase it reminds me of the trading that the US did with other countries in order to met their quota or avoid being penalized. I think that is ridiculous and it should not be allowed. A set number should be set for all countries with no trading. However, there should be incentives in place if you are under the set amount.

Taxes on fruits that are coming from exotic locations. I know that the UAE won't be happy with this. They have to me one of the few countries in the middle east, that brings food from so many exotic places such as Alaska, New Zealand, etc. I know they have a tremendous amount of cash-flow primarily because of the oil production they have, but I am sure if this were to happen they would not be happy. Also, the carriers such as FedEx and UPS will not be happy either since they might see a reduction in profit because there will be less demand for such fruits.

Also, taxes on driving and flying? Well, this is great truly, but I think car emit more than aircrafts, however, I may be mistaken. If I am right then it would be a little unjust to tax aircrafts. Whomever is flying aircrafts such as Boeing and Airbus are already burdened on the costs that are associated with maintaning it.

I really do not understand the point about taxation though. Something should be done that is instilled into the legal system and pollution if there is something that is going to be done. As you know, taxes in the past have never really beeb that much of detterant, so why start now.

We all know that George W. Bush is going to sit back and probably get a laugh or two on these people that are attempting to change something in the world, and that is primarily becuase he has never been concerned with the environment as Al Gore has been.

China also needs to be put in lock down, like this article mentions, because they are growing so fast that no one really be able to control them.

Hypersonic

Well nobody would argue that climate change is not a reality, but it is absolutely untrue that a "majority of the scientific community" is making such apocalyptic predictions. There is still a significant number of scientists who believe global-warming is a natural phenomenon. I must repeat what I said in another thread on this issue a while ago; in the 1960s scientists were warning we were at the dawn of a new ice age.

There is still much scientific investigation required to fully understand what is going on. "An inconvenient truth" may be a good documentary ...but let's be real here, it is an early presidential election campaign for Gore -- he is using the issue purely as an election platform. I have no doubt Gore means well, but could somebody please inform me just how Kyoto will help the problem -- the whole thing is so flawed -- a typical UN waste of time IMO. If US companies are forced to cut emissions, they will simply close down their operations in the US and move their facilities to China or other developing countries -- so not only does this not solve any environmental issues, it also creates unemployment and all the negative social issues associated with poverty etc.

I have little faith in politicians or bureaucrats to do anything truly proactive to turn this possible crisis around. Instead, I believe the changes will come from industry -- we are already seeing it happen, most of the major car manufacturers and those "evil" oil companies are investing heavily in alternative (greener) fuels.

Hypersonic

Exactly, carbon trading is almost farcical -- it does not address the real issue at all. Taxing and penalizing are not going to change much either -- the only real changes will come from industry -- the governments should be giving incentives to businesses to be "greener" rather than penalizing them for polluting (industry always responds much quicker to tax incentives etc.) -- but I guess it's another excuse to extort more money.

Mirage77

Natural phenomenon or not, if nobody's going to solve it who will? It's not as if our lives are not threatened by it... It's a global natural disaster waiting to happen.

An Inconvenient Truth is not politically linked I believe... Al Gore is not going to run for president in the next elections. It's merely a message Al Gore wants to spread more prolifically, instead of just holding talks or forums that do not reach out to a global audience. I do agree with your Kyoto argument - we need a body better than the UN to lead us humans.

Mirage77

Oops, ratify yes... You're right.

The doctoring of scientific journals by governments is simply shocking... It's unethical but I guess that's what politics is all about.

Hypersonic

It is true that Gore is not running for president, but until the new Democrat leader is elected, he is the face of the Democrats -- mark my words James, climate change will be the big issue the Democrats will campaign on -- Al Gore's film has everything to do with the next election -- it is about painting the picture that Bush is not going to do a single thing to save us from certain doom -- it is actually very manipulative. There are also some factual flaws in the documentary -- but I guess we should never let the facts get in the way of a good scare campaign

OK, I was being a bit cynical there, I am not pro-Bush, or anti-Democrat -- I don't think either the Democrats or Republicans will do much different from each other -- they both get donations from the big polluting industries.

Germaniac

My understanding of kyoto and such schemes is that it does exactly that - essentially rewards (financially) those companies or industries which become greener by enabling to "sell off" or trade their excess quota of carbon emissions. My understanding of how it works is that every country and company within it has a certain quota for carbon emissions. Companies who use more than their quota are forced to "buy" excess on a market, while companies who use less can sell their excess - thus providing massive financial incentive for companies to become greener. Thus it's not only a system which penalises less "green" companies but rewards those that become moreso.

Hehe yes I had a large suspician that comment would raise eyebrows, and the rest... not sure why I said it... I won't attempt at all to say that what I'm saying is gospel, as I am only really read up on one side of the argument (working for an environmental organisation, and all) it's just that it seems most of the scientists who are saying it's a natural phenomenon have a reason for saying so and it is not purely scientific - for example, links with oil companies, or whatever - as I said, please don't attack me for saying that and by all means if you have evidence to the contrary I would like to be proven wrong, it just seems that those who say it is naturally occurring have a motive for it. I know I keep quoting Gore, but I think it's quite logical in that Denton interview where he says, to the same effect, that it's just obnoxious of us as a species to think we can pour so many tonnes of carbon emmissions into the atmosphere and say it does nothing - everything we have done in the past has affected the environment, only now it's on a much larger scale (population many times what it was in the early 20th century, industry in developing countries booming, more and more cars on the road, more and more polluting, etc).

But what sort of alternative fuels are they investing in? Again, I'm no expert but from what I've heard fossil fuel companies are investing hundreds of millions of dollars into the research of 'clean' coal - something which as yet has yielded no conclusive results - yet could be investing the same amount of money into much more viable options already fully developed (ie wind, solar, etc) which could be implemented tomorrow - rather than in decades time.

The ACF got together with some big names in Australian industry - BP, Origin Energy (Aust's biggest gas and electricity provider), Visy Industries (one of Aust's largest manufacturing companies), along with around 8 others - and in response to PM Howard's claims that "agreements like the Kyoto Protocol will force industry to cut jobs and send them overseas to places like China, Indonesia and China", using CSIRO (the Australian Government's major research body) climate mapping, did the math and worked out that not only would the Kyoto Protocol not cost us jobs, it would create jobs and be a boost for the economy. Keep in mind it was not greenies saying this but companies that make billions a year out of greenhouse gas emissions - though admirably more and more environmentally minded ones.

Australia used to have something called the White Australia Policy - not sure if you've heard of it but up until the 1960's and 70's immigration of all non-white races was severely restricted and in the earlier years non-existent. One of the big political justifications for it in the latter, more politically correct years (ie, where racial superiority claims were less likely to be heard) was that mass immigration (ie, Asian immigration) would cost Aussie battler's jobs and force them out onto the street, costing the economy millions of dollars, blah blah blah, blah blah blah, to a point where it will never recover. 40 years on and after Australia's population has virtually doubled in size, mainly due to immigration, the economy has (correct me if I'm wrong) never been better; we consistentely see budget surpluses, recently had tax-cuts, and in general enjoy a pretty widespread prosperity. On the surface it seems like a pretty logical argument the anti-immigrationists were pushing - hard workers more likely to put up with worse conditions for less money would undoubtedly appeal strongly to employees and thus local jobs would be in jeopardy - the thing they failed to realise obviously is that with more people comes greater need, greater need for everything; food, housing, education, etc etc, which obviously stimulates the economy and creates a need for more jobs. I think some parallels can be drawn with the current situtation: for example, if the government imposed restrictions on coal production, or whatever, of course the coal industry will suffer in the short-term, but the demand for power still remains the same, so the green, "alternative" industry will boom, and thus snowball, with the need arising for more jobs in that industry.

A very convoluted way of saying that less supply but same demand means supply from a different source is necessary. You say it'll come from China or India, I say it will come from green technology, which will stimulate the economy but in a different way.

That was long.