Climate Protection May Cut World GDP 4% by 2030, UN Says

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Countries are trying to divide up by 2015 the burden of emissions limits needed to stave off the worst effects of climate change, including rising sea levels and more frequent droughts. Close

Countries are trying to divide up by 2015 the burden of emissions limits needed to... Read More

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Photographer: Vladimir Weiss/Bloomberg

Countries are trying to divide up by 2015 the burden of emissions limits needed to stave off the worst effects of climate change, including rising sea levels and more frequent droughts.

The cost of holding rising temperatures to safe levels may reach 4 percent of economic output by 2030, according to a draft United Nations report designed to influence efforts to draft a global-warming treaty.

Most scenarios that meet the 2-degree Celsius (3.6-degree Fahrenheit) cap on global warming endorsed by world leaders require a 40 percent to 70 percent reduction in heat-trapping gases by 2050 from 2010 levels, according to the third installment of the UN’s biggest-ever study of climate change. The world would need to triple the share of renewables, nuclear power and carbon-capture and storage to meet that goal.

“This report shows that 2 degrees is still technically possible and ought to remain the primary policy target” for climate negotiations that intend to produce a global agreement in 2015, said Bob Ward, policy director at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

A draft of the study was obtained by Bloomberg from a person with access to the documents who asked not to be identified because it hasn’t been published. A spokesman for the panel declined to comment on the document.

The research is important because it’s intended to influence the direction of UN negotiations involving more than 190 countries on how to combat global warming. The discussions have been beset by wrangles between developing and industrialized nations over who should bear the cost of tackling climate change.

Photographer: Carla Gottgens/Bloomberg

The smokestacks at a coal-fired power station in Morwell, Australia. Close

The smokestacks at a coal-fired power station in Morwell, Australia.

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Photographer: Carla Gottgens/Bloomberg

The smokestacks at a coal-fired power station in Morwell, Australia.

Rising Seas

Countries are trying to divide up by 2015 the burden of emissions limits needed to stave off the worst effects of climate change, including rising sea levels and more frequent droughts.

“Without explicit efforts to reduce greenhouse gas emissions, the fundamental drivers of emissions growth are expected to persist,” according to the study by the UN’s Intergovernmental Panel on Climate Change, or IPCC. Reaching the needed levels “will require large-scale changes of the global energy system as well as cuts in GHG emissions over the coming decades.”

Delaying action to curtail greenhouse gases through 2030 would reduce options to stabilize the gases, require much more rapid scale-up of low-carbon technologies and rely more on techniques that take carbon dioxide out of the atmosphere, such as combining burning biomass with carbon capture and storage, the researchers wrote.

Final Report

The findings are the third installment of three reports summarizing the IPCC’s work. The first study was published on Sept. 27. The second and third parts, to be published in March and April, are still subject to line-by-line revision by governments. A final document synthesizing the three is scheduled for completion in October.

“It’s a work in progress, and we look forward to discussing it when it’s been finalized in April,” Jonathan Lynn, a spokesman for the panel, said yesterday in a phone interview.

The researchers examined the policies and technologies necessary to cut emissions, including a global carbon price and more extensive use of renewable energy. Their cost estimates don’t consider the benefits of slower climate change, such as improved health, and the reduction in impacts of warming.

Greenhouse Gases

The researchers found that all scenarios that stabilize the concentration of greenhouse gases in the atmosphere at or below 480 parts per million of carbon dioxide are “likely” to contain the temperature gain to below 2 degrees Celsius. Some scenarios that peak above 530 ppm before coming down to a range of 480 to 530 ppm would also achieve that.

Containing the concentration to 480 ppm “would entail global consumption losses” of 1 percent to 4 percent in 2030. That range would rise to 2 percent to 6 percent in 2050 and then to as much as 12 percent in 2100 when compared with scenarios that don’t involve fighting climate change, according to the document. The current concentration is about 400 ppm.

“The majority of scenarios reaching these atmospheric concentration levels are characterized by a tripling to nearly a quadrupling of the share of zero- and low-carbon energy supply,” the researchers wrote.

At the upper end of those ranges, the cost of fighting climate change could outstrip the cost of dealing with the effects of climate change, according to data in the draft of the second installment of the UN report, which hasn’t yet been finalized.

Temperature Increases

That document said that a temperature increase of 2.5 degrees Celsius since industrialization may lead to losses of as much as 2 percent of global economic output. At the same time, it warned that “aggregate impacts hide large differences between and within countries.”

“Beyond 2 degrees you risk potentially catastrophic impacts such as a destabilization of the polar land-based ice sheets that would have very severe economic consequences which are not present in the economic models,” Ward at LSE said. “GDP does not tell the whole story.

‘‘You could tell the story of World War II just through GDP, but it wouldn’t tell you about the millions of people who died,’’ he said. ‘‘The losses of livelihoods a result of climate change impacts are not captured by the GDP story.’’

Small island states have argued that even an increase of 2 degrees may threaten the existence of some of their countries because of the encroachment of rising seas on land and water reservoirs.

Stern Report

A widely-cited report in 2006 for the U.K. government led by former World Bank chief economist Nicholas Stern calculated lower costs for mitigation and higher costs for inaction. It said the impacts of global warming could cost the world as much as 20 percent of economic output, compared with the 1 percent cost of containing the problem.

Other findings detailed in the UN study include:

* Greenhouse gas emissions grew by an average 2.2 percent per year between 2000 and 2010. Global emissions since 1970 outstrip those for the preceding 220 years.

* Just 10 nations accounted for 70 percent of emissions in 2010.

* Industrial emissions from developing nations now exceed those from industrialized ones, though high income nations are net importers of carbon dioxide emissions embedded in goods from abroad.

* Pledges for emissions cuts by 2020 that were made by the world’s biggest emitters in 2010 don’t correspond to the ‘‘lowest cost” emissions reduction trajectory and would lead to greenhouse gas concentrations of as much as 650 ppm by 2100.

* The lowest-cost global efforts to fight climate change involve making the majority of investments in developing nations.

The first installment of the IPCC’s report, dealing with the observed effects of global warming, was published on Sept. 27. A draft of the second summary, detailing the costs of climate change, was leaked online in November. A final version isn’t due until March. The final version of the summary is due for publication in April.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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