Title: "Climate versus the economy: what's the right trade-off?
1"Climate versus the economy what's the right
trade-off?
- Prof. William Moomaw
- The Fletcher School
- October 17, 2008
2Four reasons to be concerned
- Energy security means economic security, and our
supply of oil is vulnerable to disruption in
unstable regions of the world - The era of cheap fossil fuels is over and spiking
prices are contributing to current economic
recession world wide - Diplomatic implications of current system of oil
dependence on governments that are not
necessarily allies of democratic nations - Climate change and other pollution is growing at
a staggering rate
3(No Transcript)
4Volatile oil prices
5Comments of Secretary of State Condoleezza Rice
- We do have to do something about the energy
problem. I can tell you that nothing has really
taken me aback more as secretary of State than
the way that the politics of energy is -- I will
use the word warping -- diplomacy around the
world. It has given extraordinary power to some
states that are using that power in not very good
ways for the international system - Testimony before US Senate Committee on Foreign
Relations April 12, 2006
6What has been happening to the economy?
- IMF says US crisis is 'largest financial shock
since Great Depression - U.S. Banking Losses
- estimated at 1.4 trillion
- Forecasters see U.S. leading global downturn
7- If you think the financial crisis is a downer
climate change will produce even more severe
economic dislocations!
8Temperatures are up! 2007 tied for second warmest
year
9Heat trapping gases are up!
- Carbon dioxide output jumps to record level in
2007 - The world pumped up its pollution of the chief
man-made global warming gas last year, setting a
course that could push beyond leading scientists'
projected worst-case scenario, international
researchers said Thursday. - The increase was 3 from 2006-2007
10Carbon dioxide concentrations continue to soar
11Is it climate change vs. economic growth?
- Climate change and global warming are the result
of fueling our economic growth with oil, gas and
coal, and using the atmosphere as a waste dump
for the heat trapping gases released in their
combustion - We are already seeing major negative impacts and
costs of human caused climate change that
threaten our economic growth
12The Climate and Economy are Intimately Linked
- The Stern Review concluded that climate warming
could reduce GWP by 3-10 and in the worst case
could lead to a depression with a drop of up to
20 in per capita consumption - Estimated cost of avoiding worst climate damage
would be 1 of GWP - Addressing climate creates jobs and a sustainable
economy
13Joseph Stiglitz commenting on Stern Review for UK
government
- It makes clear that the question is not whether
we can afford to act, but whether we can afford
not to act. To be sure, there are uncertainties,
but what it makes clear is that the downside
uncertainties make a compelling case for action. - And it provides a comprehensive agenda - one
which is economically and politically feasible -
behind which the entire world can unite in
addressing this most important threat to our
future well being.
14What does science say?
The paper concludes that it is increasingly
unlikely any global agreement will deliver the
radical reversal in emission trends required for
stabilization at 450 ppmv carbon dioxide
equivalent (CO2e). Similarly, the current framing
of climate change cannot be reconciled with the
rates of mitigation necessary to stabilize at 550
ppmv CO2e and even an optimistic interpretation
suggests stabilization much below 650 ppmv CO2e
is improbable.
15IPCC 2007 Assessment Report
- Warming of the climate system is unequivocal, as
is now evident from observations in global air
and sea temperatures, widespread melting of snow
and ice and rising of global average sea levels. - Most of the observed increase in global average
temperatures since the mid-20th century is very
likely due to the observed increase in
anthropogenic greenhouse gas concentrations.
(90 confidence level)
16Has anything changed since our last debate?
- 2007 second warmest year
- More droughts in Africa, U.S. and Australia
- Intense storms such as the Myanmar typhoon
- More loss of ice from Greenland
- Glaciers continue to retreat at accelerating
rates - Loss of arctic sea ice in 2007 was 1 million sq.
miles more than the average from 1979-2000 - Loss of Arctic Sea Ice in 2008 was large as well
- Other than that, not much
17Sea ice extent 9/16/07
18With the opening of the Northwest Passage
- New shipping route will allow cheaper transport
of Chinese goods to Europe - Everyone is rushing to drill for more oil and gas
in the Arctic to put more CO2 into the atmosphere - Russia has claimed the North Pole
- Welcome to 19th century diplomacy and a 21st
century climate
19Greenland ice melt is faster than previously
measured - NASA
20Climate change is already causing damage
- Frequency of hot days is increasing with major
health effects from Europe to India - Drought is more frequent and intense in US and in
Africa - Forest fires have increased because of early snow
melt in Rocky Mountains - Coastal erosion is increasing along US and
European coasts - Intensity of hurricanes has increased by 50
- Insured storm losses have grown dramatically
21In the words of the U.S. insurance industry
- Wildfires have increased fourfold since the
1980s, and they are bigger and harder to contain
because of earlier-arriving springs and hotter,
bone-dry summers. Last year's fires broke
records this year could be worse.
22Fires in Los Angeles Oct. 2008
23Wildfire activity increased suddenly in the
mid-1980s. Hydroclimate and fires are closely
related, and climate variation has been the
primary cause of the increase in fires during
the period of their study. Longer springs and
summers that could result as the world warms will
continue to lengthen the fire season and continue
to cause more large wildfires.
Science 313 pp 940-943 18 August 2006
24This is hardly increasing economic growth
- The loss of forests to fire in the world changes
the economic return from an otherwise sustainable
resource from an economic gain to an economic
loss while increasing the amount of carbon
dioxide to the atmosphere
25Insurance Industry (cont.)
- Increasingly destructive weather -- including
heat waves, hurricanes, typhoons, tornadoes,
floods, wildfires, hailstorms and drought --
accounted for 88 percent of all property losses
paid by insurers from 1980 through 2005. Seven of
the 10 most expensive catastrophes for the U.S.
property and casualty industry happened between
2001 and 2005.?
26Storm activity in Massachusetts
27Drought in Africa is worsening
28Cyclone Nargis in Myanmar, like Hurricane
Katrina, may have been intensified by warmer
oceans
29Future damage will only increase more
- We are likely to see increases in heat waves such
as the 2003 event that killed 16,000 people in
Europe - Will see agricultural losses continue to grow as
they did in US in 2006 and Australia from 2005-07 - The rising cost of rice is due in large measure
to climate change induced droughts in Australia
that dropped rice production by 98 last year
30Climate change is largely irreversible so we
should take precautionary actions soon
- The major heat trapping gas in the atmosphere is
carbon dioxide from the burning of fossil fuels - It has a half life of approximately 100 years
- Sea level is rising faster than predicted and can
not be reversed over periods of thousands of
years - Tropical storm intensity is up 50 since 1970
31Nobel Memorial Prize winning economists agree
action now is justified to address climate change
- Robert M. Solow 1987 prize
- James Mirrlees 1996 prize
- Amartya Sen 1998 prize
- Joseph Stiglitz 2001 prize
32Solutions are possible and profitable if we act
soon
- The United States could reduce GHG emissions in
2030 by 3.0 to 4.5 gigatons of CO2e using tested
approaches and high-potential emerging
technologies. These reductions would involve
pursuing a wide array of abatement options with
marginal costs less than 50 per ton, with the
average net cost to the economy being far lower
if the nation can capture sizable gains from
energy efficiency. - McKinsey Reducing U.S. Greenhouse Gas Emissions
How Much Will it Cost? December 2007
33Economic gains from renewable energy industry
- Germany has added nearly 300,000 industrial jobs
in the renewable energy industry - Canada produces some of worlds most efficient
windows doors and other building components - Denmarks wind turbines are a leading global
brand and employ thousands
34Economic Opportunities
- Solar Energy
- Domestic hot water from solar thermal panels
- Sun Tech began in 2001 and is now a 7 billion
per year company - It will exceed all of US capacity by 2010
- Its CEO is the worlds first solar billionaire
- The company is based in ChinaO
35Economic Opportunities
- Wind power installations for electricity are
doubling every three years - In 2007 wind capacity installed exceeded either
that of nuclear power or hydroelectricity - Wind provides 21 of Danish electricity and much
of northern Germanys - Wind provided more than 1 of global electricity
last year - The fastest growing wind company is Suzlon of
India which is buying US and European firms
36Why has the US government waited?
- Powerful interests ensure the continued use of
19th century fuels, sunset technologies, and
continue to block the full introduction of
sunrise 21st century technology - Disinformation campaign by think tanks and the
fossil fuel industry - Because George Bush was a Child Left Behind
- All of the above
37Things may be changing in U.S.
- Cities and states are moving rapidly to reduce
emissions - Chicago, NY, MA, NY, CA - Supreme Court ruled CO2 is a pollutant
- A dozen climate bills before US Congress
- They set emission reductions of 50-80 by 2050
- All three presidential candidates support a
strong climate action plan
38Things may be changing (cont.)
- Large private sector companies are calling on
federal government to require GHG emissions
reductions - This includes Alcoa, BP, Duke Energy, Dupont,
General Electric, Shell, Rio Tinto - 15 members of the Rockefeller family have
publicly asked Exxon Mobil to provide an action
plan for addressing climate change to protect
shareholder value
39Address climate change and the financial crises
together
- Blocking climate protecting energy efficient
vehicles and efficient power plants has not
served US industry well - Utilize targeted energy transforming expenditures
for efficient vehicles, renewable energy,
investment in a new efficient electrical grid
into economic stimulus - Provide tax benefits for job creation
40International Negotiations are under way
- Beginning last December in Bali, new
international negotiations began for a new
agreement for nations to take real action - The U.S. is now out of compliance with
international norms on climate change - Now is the time to enter the lucrative
opportunities that are available to address
climate change at a profit
41A warming climate will reduce our economic growth
and well being!Take actions now that improve
our lifestyles, make economic sense and reverse
the growth of heat trapping gasesReductions in
emissions of just 3/year will set us on the path
to a prosperous and sustainable 21st century
economy and climate
42The Moomaw Everett Debate Continues