THAT infamous 鈥渢ipping point鈥� beyond which we foresee dangerous and unstoppable changes to global climate may be even closer to hand. Over the past two years, two of Greenland鈥檚 largest glaciers have doubled the speed at which they are falling into the sea (see 鈥淕laciers slip-sliding away鈥�). It鈥檚 a sure sign of global warming, especially since another giant Greenland glacier was spotted speeding up in 1998. If the Greenland ice sheet melts entirely, it would raise sea levels six metres or so over only a few centuries, flooding many densely populated areas of the planet.
Technically we have the means to prevent such disruptive change, so surely we should? Most people would instinctively agree. But not all economists. Notoriously, Danish mathematician Bjorn Lomborg has assembled a panel who argue that the costs of cutting emissions of greenhouse gases to stabilise global temperatures exceed the benefits.
Here, then, are two critical questions. How do we assess the economic cost of such distant, but essentially unstoppable, events? And how do we balance that against the cost of taking action to prevent it? This week the UK鈥檚 Royal Society has taken a stand against Lomborg, arguing that conventional economic analysis is not up to the job of assessing long-term climate change. Traditional methods, it says, which tend to discount the cost of future investment, give an 鈥渋nadequate representation of how people value the future, and make the impacts of climate change beyond a few decades [seem] almost irrelevant鈥�. They also fail to include factors that cannot be easily accounted, such as social, economic and environmental impacts. Such methods may be effective for running a small company, but they are no way to run a planet.
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Furthermore, economists tend to give an unrealistic picture of what it would cost to take action: some of their estimates run to tens of trillions of dollars over the next century. But this assumes the world economy will continue to run on cheap oil and coal. Other estimates, which assume the world is already moving towards more efficient use of energy, work out considerably cheaper, at perhaps a few hundred billion dollars.
If governments provide the right incentives, losing our carbon dependency and stabilising the climate could become much less painful than we fear. By some calculations it could delay the pace of economic growth by as little as a year or so, spread over the next century. If conventional economics can鈥檛 see that this is a small price to pay for the security of our climate, then there is something wrong with conventional economics.
