September 29, 2006
The Economics of Global Warming
The world would have to give up only one year's economic growth over the next four decades to reduce carbon emissions sufficiently to stave off the threat of global warming. Consultants at PricewaterhouseCoopers offer a "green growth plus" strategy, combining energy efficiency, greater use of renewables and carbon capture to cut emissions by 60% by 2050 from the level reached by doing nothing. Nuclear energy, it says, can play a role, but it is not crucial.
This scenario, which involves little real sacrifice in terms of economic growth, could be achieved only if embarked upon without delay. "If countries adopt a 'business as usual' approach, the result could be a more than doubling of global carbon emissions by 2050," said John Hawksworth, head of macroeconomics at PwC. "Our analysis suggests that there are technologically feasible and relatively low cost options for controlling carbon emissions to the atmosphere. Estimates suggest that the level of GDP might be reduced by no more than 2-3% in 2050 if this strategy is followed."
PwC envisages the Group of Seven leading economies taking the initiative, cutting their emissions by about half by 2050, while the fast-growing E7 countries - China, India, Brazil, Russia, Mexico, Indonesia and Turkey - could still increase their emissions by 30% over the period. The PwC projections see China overtaking the United States as the world's biggest emitter of CO2 by 2010 while total E7 emissions would be more than double G7 emissions by 2050, with the "big three" - China, the US and India - accounting for just over half, up from 45% today. The European Union could cut its share of global emissions to under 9% by 2050 from 15% now, while Britain's should fall to 1% from 2%.
A shift to a much less carbon-intensive fuel mix would more than double the current non-fossil fuel primary energy share to about 30% by 2050. That alone would be sufficient to reduce carbon emissions by 25%. PwC's view that renewables could do the job without having to use nuclear technology could undermine Tony Blair's argument that atomic power is crucial. Increasing energy efficiency gains to 2.6% a year from today's 1.6% would reduce emissions by a third, while carbon capture and storage - pumping power station emissions into disused gas fields underground - could achieve a further 20%. The report says a combination of all these measures will be necessary to stabilise global CO2 levels at 450 parts per million, the figure scientific opinion judges to be broadly acceptable.
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