The Economics of Climate Change

I had the opportunity to see Sir Nicholas Stern, British economist and writer of the Stern Review on Climate Change, give a lecture yesterday in Morningside Heights. Sir Nick, as his friends apparently call him, was asked by Tony Blair to write a report on the cost of curbing climate change. According to Stern's calculations, it will only cost the world 1% of its GDP to keep our carbon levels between 450-550 ppm (which is still a lot of climate change, but an amount with which our species can probably continue to survive). To do that, we'll have to cut the world's carbon emissions by 30%, and developed countries--who need to make room from China and India to develop--need to cut about 60%. What's the alternative? According to Stern, if things go on like they are for another century, the earth will be 5 degrees Celsius warmer than it was in the pre-industrial world. To give you an idea how much that is: when the world was 5 degrees Celsius colder than the pre-industrial world, Europe was under miles of ice.

The great thing about Stern--an admittedly controversial character--is that he is optimistic. His 1% GDP calculations prove that the world can curb global warming and avoid economic crisis--indeed, the world's economy can continue to grow. These numbers, however, are based--as economist Jeffrey Sachs, who spoke alongside Stern, pointed out--on one major unknown: we are assuming that Klaus S. Lackner's theory--which posits that we can catch carbon emissions from coal in the air and bury it underground--is correct. Lackner's theory has only been tested in small amounts--never on a mass scale. What will be the ramifications of burying 100s of trillions of tons of carbon in the ground? Who knows? Welcome to the 21st century.

The point is this: it's time to act now. Stern argues that any chance we have of saving the world is predicated on us--the whole word--acting within the next 15 years.