Issue Date: February 19, 2007
Fixing Global Warming
The failure to reduce carbon dioxide emissions will cause yearly global damage equal to 5-20% of the world's gross domestic product by 2050, whereas taking action to cut emissions would take 1% of global annual GDP, said Nicholas Stern, a top economic adviser to the U.K. government and former chief economist of the World Bank.
Stern was speaking to the Senate Energy & Natural Resources Committee during one of four global-warming-related congressional hearings held last week.
A 1% GDP figure, Stern noted, is not "trivial" but "is the kind of cost we accommodate all the time—for example, through changes in exchange rates." Rich countries, he said, should lead the way, as they are responsible for most greenhouse gas emissions and have resources for technological solutions.
Stern appeared at the hearing with two other economists who quibbled with parts of his methodology but did not question his overall conclusions.
However, Sen. Pete V. Domenici (R-N.M.), the committee's ranking minority member, questioned elements of the report's economics, and he warned against "settling the issue here" in the U.S. without doing so in China and India. Both countries have growing economies and, like the U.S., are dependent on coal.
Stern noted that both countries are making new efforts to reduce CO2 emissions because they are becoming more aware of how strongly they will be affected by climate change. And both, he said, look to the U.S. for technological leadership.
China, Stern added, established a year ago a goal of reducing energy intensity by 25% over the next five years; the Bush Administration has a goal of reducing energy intensity by 18% by 2012.
Stern and Domenici joined in stressing the importance of human adaptation to climate change, since its impact cannot be prevented over the next two to three decades under the best of circumstances. Adaptation, Stern said, would cost tens of billion of dollars a year to developing countries alone.
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