CURRENT calculations of the economic impact of global warming are 鈥渢he economics of the madhouse鈥�, according to a prominent green economist. Paul Ekins of Birkbeck College, London, attacked studies by the Intergovernmental Panel on Climate Change that compare the potential costs of global warming with the price of preventing it. 鈥淚 did not become an economist to produce figures of this kind,鈥� Ekins told a meeting of municipal leaders in Berlin last week.
The IPCC鈥檚 economic analysis, now in draft form, will be published later this year as part of the panel鈥檚 Second Assessment Report. Last month, the Indian environment minister Kamal Nath attacked the IPCC for valuing an American or European life at ten times the value of someone living in a poor country (This Week, 1 April).
The draft report says that a doubling of the preindustrial concentration of carbon dioxide in the atmosphere is likely to reduce global GDP by between 1 and 3 per cent by the middle of the next century. Such results, said Ekins, 鈥渟uggest that very little abatement of carbon emissions is justified, because the costs exceed the benefits鈥�.
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But he criticised the assumptions behind the calculations. Farming land, for instance, was assessed simply on its market value without recognising that it represented a home and a source of food for billions of people. The IPCC economists put relocation costs at $1000 per head if such land in poor countries became flooded or turned into desert. 鈥淭he value of the land to people, over and above its market value, the hardship and stress caused by millions of people moving 鈥� none of these is included,鈥� said Ekins.
According to an estimate by William Cline, who contributed to the IPPC report, a predicted 7 per cent decline in world agricultural output as a result of a doubling of atmospheric CO2 would cost $40 billion 鈥� a relatively modest figure in the overall calculation. 鈥淭he implication is that we can do without agriculture, even though nations such as Egypt could lose up to half of their food output,鈥� said Ekins. 鈥淚t would induce famine of a kind the world has never known. But that also is not included.鈥�
David Pearce of University College London, another contributor to the IPCC report, stressed that the purpose of the economic studies was purely academic, and not to provide a prescription for what policies governments should adopt in response to global warming.
Ekins also claimed that the IPCC economists had exaggerated the cost of preventing global warming. Much of the US鈥檚 hostility towards tackling the greenhouse effect arose from a study which put the cost to the US of taking action at $3.6 trillion. But this cost would be spread over 110 years, said Ekins, amounting to reducing an annual growth rate of 3 per cent by 0.074 per cent. 鈥淭hey wouldn鈥檛 even know they had made the sacrifice.鈥�
Ekins calculates that industrialised countries could cut emissions of CO2 by 20 per cent in 10 years 鈥渁t practically no cost鈥�.