Climate change could cause the world's worst recession since the Great Depression of the 1930s, warns an extensive U.K. government report released on Oct. 30. To avert such a catastrophe, the report says, greenhouse gas emissions need to be reduced 60 to 80% below 1990 levels by 2050.
The review was prepared by Nicholas Stern, head of the U.K. Government Economic Service and former chief economist at the World Bank. By 2050, damage from climate change could equal 5 to 20% of world gross domestic product (GDP), but the cost of cutting emissions to avoid the damage would be only about 1% of total global GDP, the report says. In other words, the benefits of cutting emissions considerably outweigh the costs.
"The conclusion of the review is essentially optimistic," Stern says. "There is still time to avoid the worst impacts of climate change. But delaying action, even by a decade or two, will take us into dangerous territory."
The review finds that unabated emissions may cause average global temperatures to rise as much as 5 °C by the end of the century, transforming the physical geography of the planet. The preindustrial concentration of CO2 in the atmosphere was 280 ppm. The concentration of greenhouse gases (measured as CO2 equivalents) could nearly double to 550 ppm by 2035, the report says, causing a global temperature rise exceeding 2 ??C and threatening 15 to 40% of species with extinction.
Climate change, the report says, places the basic elements of life at risk—access to water, food production, health, and use of land and the environment. Melting glaciers will increase floods and strongly reduce water supplies, threatening one-sixth of the world population on the Indian subcontinent, parts of China, and the Andes of Latin America, it notes.
The 700-page report recommends stepped-up research on low-carbon technologies and several economic measures to avert dangerous climate change. "Globally, support for R&D should at least double," it says, "and support for deployment of low-carbon technologies should increase up to fivefold." It suggests four basic ways of cutting emissions: reducing demand for energy-intensive goods and services, increasing efficiency in energy use, avoiding deforestation, and switching to low-carbon technologies for power, heat, and transport.
To motivate change, the review says, a cost should be placed on carbon emissions through taxes and an emissions-trading system that allows companies to buy and sell emission permits. The global carbon market is already worth $22 billion.
Some U.S. lawmakers and environmental groups praise the report. "It leaves no doubt that acting now, not later, is not only environmentally responsible but also cost-effective," says Sen. John F. Kerry (D-Mass.). "The report should shatter once and for all our state of denial on the impacts of global warming," says David G. Hawkins, director of the Climate Center at the Natural Resources Defense Council.
However, Jerry Taylor, a senior fellow at the Cato Institute, a conservative think tank, disagrees: "Only a very small percentage of GDP in industrialized nations is affected by climate one way or the other," and in those countries, the economic benefits from warming, such as the ability to grow crops in northern Canada, are about equal to the monetary damages.