Friday, October 06, 2006

The Economics of Green

A recent report by the leading economic and strategic analysis firm PriceWaterhouseCoopers, The World in 2050, argues that, contrary to U.S. government assertions, reducing the world's carbon emissions 60% by 2050 would have little economic impact—and might have substantial economic benefits—if we did it right. The report compares several scenarios, with the emphasis on two of them, and concludes

The projections demonstrate that if countries sit back and adopt a "business as usual" approach, the result could be a more than doubling of global carbon emissions by 2050. Based on current scientific thinking, this could have potentially serious longer term implications in terms of global warming and related climate change.

On the other hand a scenario such as the "Green Growth Plus" strategy outlined in the report could allow for continued healthy growth whilst controlling carbon emissions.The Green Growth Plus strategy

incorporates possible emission reductions due to a greener fuel mix, annual energy efficiency gains over and above the historic trend, and widespread use of carbon capture and storage (CCS) technologies. Of the scenarios considered in the report, only this ‘Green Growth Plus’ strategy stabilises atmospheric CO2 concentrations by 2050 at what the current scientific consensus suggests would be broadly acceptable levels.
The greener fuel mix considered in the report includes nuclear power, biofuels, and alternative power sources like wind and solar. It is, according to PriceWaterhouse, a strategy for maintaining prosperity without destroying the planet.

In the long run, we will have to develop a new type of prosperity that does not depend on growth. But without change along the lines suggested by PriceWaterhouse, we will not get to the long run. Green Growth Plus is not the ultimate solution to the problem of living with limitations, but it or something like it would be a step in that direction. And it is far more sane and hopeful than business as usual—the old style of growth that is slowly killing us.


1 comment:

Anonymous said...

Many in the US government and many economists are wrong in assuming that addressing climate change will somehow be incredibly expensive (many willfully make absurd assumptions, such as business is now operating in the best possible manner), but it will cost. John Holdren, president of American Association for the Advancement of Science, etc, etc, etc, says that we will not get to 2050 levels of prosperity until 2051 or 2052 if we pay for climate change mitigation. Implied in everything Holdren says is that we might not get there at all if we fail to address climate change.

I don't know much about PriceWaterhouseCoopers, but why is their analysis any better than the analysis of other non-peer-reviewed sources, such as environmental groups? I ask, because it would be surprising if any peer-review analysis suggests 90 -95% per capita reductions in American greenhouse gas emissions by 2050 (for climate justice, it is not fair to ask both Cambodians and Americans to cut back by the same percentage) that omits increases in nuclear power.

The main advantage of carbon sequestration for coal power is not that it is greenhouse gas free (it is perhaps 10 - 20% as bad as using coal power) but that it is not as bad as coal power for countries such as the US that insist on using coal to make electricity. Indeed, it may be that we want to allocate the coal we use for fuels rather than for electricity. (If we burn all the world’s coal, we return to the time before the dinosaurs, before greenhouse gases were stored in fossil fuels, when crocodiles lived in the Arctic. We can use only a fraction of the world’s coal.)

Significantly improved efficiency, more solar and possibly much more wind, these are part of any future that limits the catastrophic effects of climate change. But so is a large increase in nuclear power.

It is important for us to look at what we value, and for our behavior and the policies we push to be informed by our values. However, we will not get there from here unless we confront two major scary topics:

• are we living diminished lives if we live with (much) less? and
• nuclear power is part of the solution.

I would hope that we would be willing to confront the hard issues. Supporting increases in efficiency and solar power is easy. But would we be willing to examine if how we live is in accord with our values? policy choices which are not aligned with the thinking of policy experts? and a willingness to pay more than experts assume just in case they underestimate the costs?

We have until 2015, or perhaps 2012, to make major infrastructure changes in the US and worldwide. No matter what, our future will include sea level rise of several feet per year. If we postpone the hard questions much longer, we choose a future with sea level increases of several meters per year.

Karen Street