Australian Lefty on Politics, Governance, Science and Info Management

Economists want massive increase to environmental research

Posted by Dave Bath on 2008-01-21

You know things are serious when beancounters want white-coated nerds to get a fourfold increase in funding, as stated in a recent Stern-Report-for-the-time-pressed.

"The costs of stabilizing greenhouse gas concentrations" from group-blog of Economics professors and researchers states the following:

Large investments in R&D (four times the current levels) would be necessary to improve existing energy technologies and/or to develop new ones in order to meet the targets.

The authors modelled economic costs using not the (poor) assumption of a single central planner, but subdivided the world economy into a more realistic 12 regions, and came up with the following hits to GDP by 2030 for two atmospheric CO2 targets:

  • 550 ppm (common from the US, and unrelated to temperature change) : 0.4% of GDP
  • 450 ppm (from the EU and aimed at a 2 degree Celsius constraint) : 1.2%
  • Considering that 1.2% is commonly the difference between high and low estimates for GDPs for individual countries by respected economics forecasters when only looking a year ahead, the cost to the world economy of mitigating climate change to even the most ambitious EU targets is certainly "within statistical error" of an assumption of no change to policy and no threat from climate change.

    In other words, "insurance" to cover the drastic effects of the threat is minimal, and certainly smaller than the hedges companies make against bad investments.

    Another related article at VoxEU here also points to the importance of research:

    No climate-change strategy will work unless it is consistent with developing countries’ continued growth. So curbing emissions requires cheaper clean energy than is currently available. And that requires innovation.

    When economists argue that scientists need much more money to address a critical problem, and the citizenry want action, what could possibly motivate politicians to take a different view?  The only possible answer to this question is damning and suggests the need for political reform across most of the world’s nations – including Australia.

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