April 5 (Bloomberg) -- U.S. President Barack Obama’s administration is concerned that a crucial United Nations report on climate science may be too harsh in assessing the cost of fighting global warming.
Such a finding may lower the incentive for the world to reduce fossil fuel pollution and feed the arguments of those skeptical about whether it’s worth spending money to curtail rising temperatures.
The report will be completed by hundreds of scientists and government officials at a UN meeting in Berlin next week. It’s due to include an assessment of the economic losses that would come from cutting emissions. That along with calculations about the costs of doing nothing is meant to guide policymakers around the world working on climate-protection measures.
“The discussion of the economic costs of mitigation is too narrow and does not incorporate co-benefits of action,” U.S. officials wrote in a submission to the UN, according to a document obtained by Bloomberg. They said including only one side of the equation “unnecessarily skews the information.”
The comment refers to “global consumption losses” identified in the report of as much as 4 percent in 2030, 6 percent in 2050 and 12 percent in 2100 as a result of action to protect the climate, according to a draft leaked in January.
State Department officials are pressing to factor in improvements to public health and lower energy costs from increased efficiency that would happen if fossil fuels were limited. Those would offset the price to be paid for switching over to cleaner forms of energy such as wind and solar and paring back on lower-cost fuels such as coal.
The study from the Intergovernmental Panel on Climate Change is designed to influence governments around the world. Envoys from 194 nations next year intend to adopt an agreement on fighting climate change and will use the UN report to guide their discussions.
A draft of the study and a 222-page document containing comments from government officials was obtained by Bloomberg from a person with official access to the documents who asked not to be further identified.
The U.S. State Department declined to immediately comment.
Jonathan Lynn, a spokesman for the IPCC, said that the report’s wording will “certainly be improved” during a week-long session starting April 7 in Berlin to review the text line-by-line.
“The IPCC asks governments to provide these written comments on the final draft of the summary for policymakers to help the authors prepare for the discussions,” Lynn said in an e-mailed response to questions. “The aim of those discussions is to improve the clarity and rigor of the document.”
The draft didn’t put a dollar value on the costs or define what it means by consumption losses, a term that drew criticism from Western nations that would prefer a better-known metric, like gross domestic product. The paper said the figures “do not consider the benefits of mitigation, including the reduction in climate impacts.”
In the U.S., Obama’s administration has argued that regulations such as those requiring automakers to improve the gas mileage in their vehicles or setting efficiency standards for microwave ovens actually end up benefitting the economy because consumers have to buy less energy.
Sweden and Norway were among other nations seeking to include in the report data on the benefits of cutting emissions. Those include the avoided damage that would result from a lower amount of warming, and consequently lower sea levels as well as less melting of glaciers.
Comments from governments reacting to drafts of the report underscore the difficulty in assessing the costs and benefits of acting against global warming. British officials expressed concern that overstating the price of cutting emissions would give a boost to those who doubt action is needed.
The statement about consumption losses “could easily be taken out of context by those opposed to climate action,” the U.K. delegation said in the document. “The fact that these figures do not include climate impacts only comes much later.”
That’s a reference to a caveat in the UN draft that the costs “do not consider the benefits of mitigation, including the reduction in climate impacts.”
Officials at the U.K. Department of Energy and Climate Change declined to comment.
The IPCC report on how the world can reduce emissions is the third so-called summary for policymakers in its current round of assessment.
The first summary in September analyzed what changes to the climate have already been observed and outlined predictions for the future. The second on March 31 set out which parts of the world are the most threatened and how humans can adapt to warming temperatures. A fourth instalment in October will tie together the previous three reports. All of them summarize thousands of pages of scientific findings.
Japan said the writers of this report and the second summary should work together “to compare income loss by impact of global warming and cost of mitigation in (the) same metric.”
Hiroshi Tsujihara, director of the research and information office, the Global Environment Bureau of the Ministry of the Environment in Tokyo, declined to comment.
Cost vs Benefits
The Japanese query reflects the concern among government officials who are seeking to identify the trade-offs and benefits involved with spending to cut emissions. Cutting fossil fuel pollution, for example, can lead to reductions in respiratory illnesses. Spending on insulation can pare back energy costs.
In the second report, researchers said global economic losses from further warming of about 2 degrees Celsius (3.6 degrees Fahrenheit) range from 0.2 percent of income to 2 percent. They cited “incomplete” estimates and said costs are more likely to be at the higher end of the range.
The U.S. was among several governments to question why the panel isn’t using GDP instead of the less-understood term consumption losses.
“Most readers will be more familiar with the idea of ‘GDP loss’ as opposed to ‘global consumption loss’,” the U.S. said. “The authors should consider revising the text accordingly. Moreover, this presentation of the costs of mitigation should always be presented with a similar analysis of what it would cost if action on climate change were not taken.”
Japan said it “would appreciate if cost of mitigation is measured in percentage of global GDP.” Canada said the term consumption losses “is not understood by the reader,” and the European Union said “the choice of consumption losses as a metric seems to be unclear and misleadingly suggests relatively higher impact than other metrics.”
The difference between the two terms may be in how investment is treated, though most people would equate consumption losses with a drop in GDP, said Richard Rosen, executive vice president at the Tellus Institute, a Boston-based nonprofit policy research group.
The government queries are valid because the UN researchers “don’t indicate to the public how damage costs could be so big that the net benefit of avoiding damage costs could completely overwhelm their calculations of net mitigation costs,” he said.
Rosen also questioned the validity of trying to calculate costs and benefits so far into the future.
“None of the costs or benefits of mitigating climate change can be forecast to any scientifically credible level of accuracy over the long run,” Rosen said. That’s because of “the fundamental uncertainties associated with all the hundreds of key assumptions that need to be made.”
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