Massive climate change is avoidable at low cost

The report by Working Group III of the Intergovernmental Panel on Climate Change (IPCC) identifies ways of limiting human-induced global warming to a maximum of 2-3°C relative to the pre-industrial value. Without additional efforts to cut CO2 emissions, the amount of greenhouse gases in the atmosphere will continue to increase during the coming decades – and so will the Earth's temperature. Several international studies have shown that the necessary steps to limit global warming would cost less than 1% of global GDP. The most conservative estimate put forward by the IPCC is 3%. "But even if this rather more pessimistic assumption is correct, the economic costs of climate protection are still affordable", says Ottmar Edenhofer, Chief Economist at the Potsdam Institute for Climate Impact Research.

The IPCC's cost predictions are largely based on research carried out by the Potsdam Institute. The new UN report quotes and endorses the findings of Edenhofer's team of researchers, affirming that the economic costs of climate protection would decrease through a pro-active climate policy geared towards stimulating technological change, which would drive down the costs of climate technology. "We calculate that the cost of achieving the 2°C climate target is just 1% of global GDP – equivalent to no more than a three-month delay to economic growth by the year 2030", says Edenhofer. The report also shows that all the conditions to meet the 2°C climate target must be put in place within the next few years, emphasizes Edenhofer. "In the truest sense of the word, society simply cannot afford a "wait and see" policy any longer". As the IPCC points out, if emissions rates continue to rise unchecked, this could result in global warming of as much as 6°C by the end of the century. The consequences for ecosystems and the global economy would be devastating, as the second volume of the IPCC report, published in April, and the UK's Stern Review, unveiled in 2006, make clear.

“The industrialized countries are caught in a "climate trap" which they can only escape with the help of the newly industrializing countries. So we need to develop highly attractive technologies and patterns of production and consumption which have low climate impact and which China, India, Brazil and other countries will adopt in their own self-interest", says Hans Joachim Schellnhuber, Director of the Potsdam Institute and climate policy advisor to the German Government during Germany's EU Council Presidency and G8 Presidency. Schellnhuber is confident that it is quite possible to achieve a 40% reduction in emissions by 2020 "without the lights going out across Germany".

The expansion of renewable energies, improved energy efficiency and carbon capture and storage in geological formations all play a key role, according to the IPCC. Renewable energies could make a 30-35% contribution to electricity supply worldwide by 2030, with capacity for further expansion thereafter. At the same time, a fuel switch from coal to natural gas could be used to good effect as a means of further reducing CO2 emissions. By contrast, nuclear energy – discussed in detail by the IPCC for the first time – plays a far less significant role in the strategies which it proposes. Although the IPCC anticipates that new nuclear plants will be constructed during the coming decades, the report predicts that the share of nuclear energy in global electricity generation will increase to no more than 18% compared with the current figure of 16%. That prediction even holds if the price of CO2 rises to 50 euros per tonne CO2 equivalent – from a current figure of just one euro.


More information:

Summary for Policymakers (SPM) of IPCC, Workgroup III:

Home page of Ottmar Edenhofer >>

PIK Press release on Costs and Strategies of Global Climate Protection, 15 Mar 06


Ottmar Edenhofer, Potsdam Institute for Climate Impact Research (PIK), Germany
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