Uchenna Izundu
International Editor
LONDON, Oct. 31 -- Environmentalists, politicians, and business groups have urged the UK government to develop a detailed policy on climate change in their response to a new report on the economic effects of global warming.
Nicholas Stern, head of the UK's Government Economic Service and former World Bank chief economist, prepared the report at the request of the UK Chancellor and reported to both the Chancellor and Prime Minister Tony Blair, who has long voiced concern about climate change.
The report estimated the global cost of taking no action to lower carbon emissions at $3.68 trillion. It said stabilizing the atmospheric concentration of greenhouse gases at 500-550 ppm of carbon dioxide equivalent (CO2e) would cost about 1%/year of global gross domestic product by 2050.
The current greenhouse gas concentration is 430 ppm CO2E, rising at 2 ppm/year. Stabilization in a target range of 450-550 ppm would require emissions cuts of at least 25% below current levels by 2050 "and perhaps much more," the Stern review said.
Stabilization at 450 ppm CO2E, it said, would be "very difficult and costly." If responses are delayed, it added, the opportunity to stabilize at 500-550 ppm "may slip away."
According to the review, the global power industry will have to be at least 60% "decarbonized" by 2050 to stabilize greenhouse gases at the upper limit of the target range.
Stern said: "There is still time to avoid the worst impacts of climate change, if we act now and act internationally. Governments, businesses and individuals all need to work together to respond to the challenge."
Countries in the developing world are most vulnerable to increases in global average temperature. The review expects the greenhouse-gas concentration to be double its preindustrial level by 2035, "virtually committing us to a global average temperature rise of over 2º C." It asserted a 50% chance that the rise in global average temperature "in the longer term" will exceed 5º C.
"Such changes would transform the physical geography of our planet, as well as the human geography—how and where we live our lives," the report said.
Stern urged governments to establish a consensus carbon pricing through taxes, trading, or regulation; support development of low-carbon technologies; and remove barriers to energy efficiency.
A spokeswoman for the UK Offshore Operators' Association said, "It is important to remember that 45% of UK offshore production is gas and that it was mainly the switch from coal to gas in the 1990s for electricity generation that has allowed the UK to meet its Kyoto emissions targets."
Stephen Machin, Head of Power and Utilities at KPMG, told OGJ that a key subject of the Stern report is determination of the carbon price, which will be crucial to investment planning.
Contact Uchenna Izundu at [email protected].
