IPCC estimates costs of climate care

4 May 2007–Climate change can be curbed, but at a price. That’s the conclusion of the United Nations Intergovernmental Panel on Climate Change (IPCC) briefing this morning from Bangkok. After a week of editing by hundreds of contributors, the summary of the IPCC’s report on the mitigation of climate change is now available.

After the presentations of the Physical Science Basis for Climate Change (Working Group I, 6 February) and the Impacts, Adaptation and Vulnerability for Climate Change (WG II, 6 April), the report from WG III on Mitigation of Climate Change almost reads like good news. It says: ≥Studies indicate that there is substantial economic potential for the mitigation of global greenhouse gases emissions over the coming decades that could offset the projected growth of global emissions or reduce emissions below current levels.≤ In other words: climate change can be curbed. Be it at a cost.

The costs of climate care depend on how much emissions are reduced, or avoided. The IPCC estimates the macro-economic costs for mitigation towards stabilisation of greenhouse gases in the atmosphere of between 445 and 710 ppm CO2 equivalent in the medium term (2030) at between a 3% decrease in global GDP and a small increase in global GDP. It remarks that regional costs may differ significantly from the global average.

The next twenty to thirty years will be decisive on what kind of world we will end up in, says the IPCC. Emissions of greenhouse gases would need to peak in the near future and decline thereafter in order to stabilise the concentration of greenhouse gases in the atmosphere. For the long term (2050) the IPCC correlates the stabilisation level of greenhouse gases in the atmosphere with the global temperature increase above pre-industrial levels and the related loss of GDP:

CO2 eq. ppm Temp.increase Range GDP-reduction 2050 (%) Peak CO2 emissions

445 – 535      2.0 – 2.8                < 5.5                            2000 – 2020

535 – 590      2.8 – 3.2                < 4 (median 1.3)             2010 – 2030

590 – 710      3.2 – 4.0                -1 to 2 (median 0.5)          2020 – 2060

Keeping in mind that most experts agree that the global temperature increase should be limited to 2 degrees Celsius, the world faces a considerable challenge.

Source: IPCC IV, WG 3, SPM

Mitigation measures vary considerably in their cost. Measures with net negative costs (read: benefits) have the potential to reduce emissions by around 6 GtCO2 equivalent per year in 2030, which is about 10% of the total mitigation potential in 2030. Further reductions come at a price. Although there is uncertainty surrounding the exact numbers,  the report gives estimates on the mitigation potential for different CO2 price levels in 2030. Up to 20 $/tonne CO2, 12 GtCO2 equivalent can be reduced per year. Up to 50 $/tCO2, 17 Gt and for up to 100 $/tCO2, 22 Gt.

Although the report stresses that all sectors will have to contribute towards mitigation, the largest mitigation potentials are found in buildings, the energy sector and industry. Buildings, new and existing, can be made much more energy efficient. The potential has so far hardly been realised because of a lack of available technology, financing and reliable information. The energy sector can decrease its emissions through end-user efficiency improvement, by increasing the share renewable energy and by carbon capture and storage. In industry, energy-intensive plants are increasingly found in developing economies. New factories are generally up to standard, but the older ones keep functioning and their energy efficiency is generally not improved.

The IPCC regards the current global response to the climate problem as one of its notable achievements, together with the Kyoto Protocol and the stimulation of an array of national policies targeted at controlling greenhouse gas emissions. A wide variety of policies are now available to governments to create incentives for mitigation action, the IPCC says. There is experience available with various instruments such as tradable permits, financial incentives, voluntary agreements and more to make use of. A whole list of policies, measures and instruments proven to be effective in the different sectors is included in the report.

One overall policy is specifically mentioned: a real or implicit price of carbon. An effective carbon-price signal could realise significant mitigation potential in all sectors.

Science has spoken. It has offered different scenarios, it has shown how climate change can be curbed, what effects policies will have and what costs are involved. Now itπs up to the politicians. For example: at the G8+5 meeting next month in Heiligendamm.

Copyright © Jos Wassink, Het Inzicht – 2007