Over the past 30 years global warming has become a hotly debated topic. The debate has centered around three issues: 1. Is global warming occurring? 2. If so, are the changes being caused by human activity? 3. What are the implications of a warming planet?
Nowadays, there is widespread scientific consensus around issue 1 and 2.
Scientists are confident that the global mean temperatures is about 0.5 °C higher than it was a century ago; that atmospheric levels of CO2 have risen over the past two centuries due to human activity; and that CO2 is a greenhouse gas whose increase is likely to warm the earth.
Of course there is still some contention around these issues, but most of the hype is media generated and lacks credence. In fact, some of the most noted scientific skeptics of global warming do not deny that the world is warming. No, instead their skepticism is manifest around three areas:
In this article I set out my views on why I think we should address the global warming issue with full force and take action to prevent catastrophic climate change.
I have included a comments section where you can share your views and stimulate debate. I have also provided some useful resources (which have a variety of views on the topic) if you are looking for more detailed information
Whether we like it or not, global warming is a politically charged issue that requires unilateral consensus if it is to be adequately addressed.
We have gone some way in trying to put together a framework to deal with global warming (i.e. Kyoto Protocol, Intergovernmental Panel on Climate Change etc.), but have been less effective at reaching a collective action plan.
The reason why we have struggled to reach a universal response to global warming is multifaceted, but includes issues such as:
So given all these issues and more, why do I think we should take collective action
Global warming has the potential to lead to catastrophic climate change.
The impacts, some direct and many indirect, will be felt globally and have implications on the economic, political and social structures that make our world function efficiently.
We know that global warming has this potential as our climate models have predictive capacities that allow us to identify best and worst case scenarios.
I use the word potential as it implies a level of uncertainty and as an economist the idea of uncertainty is important. Uncertainty implies that a risk management approach should be applied to any response that we deliver.
The question is therefore:
What is our appetite for risk and how much should we invest to manage / mitigate this risk?
Two very important questions which, if you are an asset owner, you would have probably addressed at some point.
For example, if you own a house it is likely you bought fire and theft insurance to cover you should your home burn down. The level of insurance would be dependent on the value of your home and possessions in it.
You may have to pay higher premiums if you are near a forested area that frequently has fires.
You may choose not to buy insurance if you feel the risk is very low and could stomach the cost and upset should your home ever burn to the ground.
The same essentially applies to global warming and climate change. However, there is an additional element which complicates the choice of which risk approach to take – irreversibility.
In the case of your home burning down, the impact is catastrophic, but not necessarily irreversible – i.e. you could buy another home; albeit different in structure, location, format etc.
Whereas, we can’t buy another species; or ecosystem; or island community; or indeed, planet. Once these things are gone, they are gone – irreversible impact.
Uncertainty, coupled with potential catastrophic impact and irreversibility, suggests that we should have a low appetite for risk.
That answers are first question.
The second question was around:
How much should we invest to manage / mitigate this risk?
This question is a little bit more complicated as you can quite quickly get yourself into difficult calculations (i.e. what is the value of an ecosystem, or a species of insect etc.).
It is also difficult to calculate the cost of implementing a risk management solution and the unintended consequences (i.e. if we invest in renewable energy, how much will it cost in comparison to alternatives and what will the implications – either positive or negative – be for employment, industry adjustments, infrastructure, consumers costs etc. All very challenging questions.)
Fortunately, someone has attempted to answer this question. The Stern Review on the Economics of Climate Change is a 700-page report which looks at the costs of climate change.
It overwhelmingly concludes that strong, early action on climate change far outweigh the costs. Stern expresses this as a measure of global GDP, stating that without action, the overall costs of climate change will be equivalent to losing at least 5% of global gross domestic product each year, now and forever.
The Review proposes that one percent of global GDP per annum is required to be invested in order to avoid catastrophic climate change.
In 2008, Stern increased the estimate for the annual cost to 2% of GDP to account for faster than expected climate change.
Although the Stern review received a mixed response in terms of his approach to discounting uncertainty and the cost being borne far in the future, the study goes some way to illustrating the potential costs and benefits of taking or not taking action.
From my perspective, an investment that is smaller than the potential cost of not taking action makes economic sense; particularly if one considers the impact on future generations.
Surely it is our duty to future generations to be able to say that we were aware of global warming and acted with caution given the information at the time to prevent catastrophic climate change.
Jess has spent years travelling the world full-time. Nothing else comes close to the reaches of this emotive activity...