A CALL ON SIR NICHOLAS STERN FOR DISCIPLINE ON
CONTRACTION AND CONVERGENCE
To avoid dangerous rates of climate change, we have to solve the problem
faster than we create it. Though this is a simple and obvious test, it
is a great challenge as rates of change towards an increasingly adverse
climate are already now well established.
Like others before it, Sir Nicholas Stern's recent report recognises the
challenge but does not rise to it. Rising to it means showing that we
are collectively organising to do enough soon enough globally to avoid
dangerous rates of climate change. In other words success requires that
all the new investment needed must be governed - as Al Gore rightly says
- by prevention and not by an aimless trade-off between mitigation and
adaptation. Stern's Report avoids the test and loiters in the trade-off.
Prevention requires a global framework that demonstrates we all
understand, take and pass the test we're now faced with. To avoid
dangerous rates of climate change, we must contract our overall future
greenhouse gas emissions to the global atmosphere to nearly zero within
the next half a century sharing the available entitlements to emit
equally per capita, in other words constitutionally.
This constitution is "Contraction and Convergence" (C&C) and it already
has huge support: - www.gci.org.uk/briefings/ICE.pdf
There is no other conceivable way for success. Any other basis for
sharing the task of contraction requires a random continuation of the
inequality that will keep us locked into this deepening crisis. In total
and sharing the rights equally, we must emit not more than once the
amount we have emitted already, in other words about a total of a
quarter of a trillion tonnes of carbon to match the total so far. More
than this raises the risk of runaway climate change, and any excess must
be neutralised through carbon sequestration. Doing this within a global
framework that demonstrates this and to which we are all legally
committed and bound is sine-qua-non.
The Stern report correctly recognises that the economic externality of
climate change is the greatest example of market failure in history. He
also says that we are now in a situation of appalling global inequity
where the poorest, who are the majority and the least responsible for
causing climate change, are also the most vulnerable to its lethal
effects and are already bearing the heaviest brunt of the damages.
Stern described C&C as 'an assertion' but allowed himself the luxury of
asserting that C&C was unlikely to get support. Defending his stance at
a recent public meeting at the LSE he said that equal rights under these
limits was, "too difficult to get your head around" before just taking
for granted that the very unequal shares that he prescribes as being
necessary to trade his un-quantified emissions entitlements, are so easy
to understand that they don't even require discussion let alone support.
Economic analysis as Stern says is at the margins and he notes that
climate change is anything but a marginal problem. This admits head-on
that economists work at the margins, can predict little and achieve and
commit to nothing. This leaves only the politicians to make the
decisions that deal with this massive structural failure and achieve the
corrective success we all now desperately need. 25 of the world's most
powerful corporations wrote last year from the World Economic Forum in
Davos demanding this leadership.
It is politicians who must give the leadership to deal with the enormous
inequity of this great market failure to prevent the lethal trends it
has begat. Unavoidably, a framework for this leadership is required.
This framework must lay out how over a full, defined period from now
until we achieve a safe and sustainable atmospheric concentration of CO2
we will all, on a global scale, actually achieve it. By definition such
a framework needs to exist so exceptions can be tested.
At COP-12 UN General Secretary Kofi Annan found a 'terrifying lack of
leadership' on climate change. The result of this is that the investment
community are faced with an appalling dilemma. Investors are urged to
invest in what is obviously an inadequate 'market-based framework', when
a full-term 'framework-based market' is urgently required so as to save
ourselves. One must assume that rational investors will acknowledge the
primacy of such a framework, ahead of merely making short-term gains
WHILE we don't solve the problem. Without such a framework, investors
face the double jeopardy of wasting money on random projects and
inadequate arrangements, while also losing the money that is left to the
potentially limitless damages of a deepening market failure.
It is in this critical area where Sir Nicholas Stern's report is
obviously weakest. His 'positioning-numbers' are aspirational and make
matters worse as they have no integrating rationale. They fail to resist
the trends where we continue to cause the problem faster than we act to
resolve it. This depends on people’s ignorance of the trends which is
obviously ending and so won’t work. In 2000 the UNEP Financial
Initiative published growth-trends of uninsured loss estimates due to
'un-natural weather related events' that were averaging over 6% per
annum, in other words already these damage costs were seen to be
progressing at twice the rate of the benefits of economic growth. UNEP
also projected these trends for several decades to demonstrate that
these losses WILL in due course negate the entirety of economic growth,
unless drastic action to halt this race to market-oblivion is organised.
At COP-12 in Nairobi UNEPFI published a report which said that within 15
years the average annual insured losses would top one trillion dollars
per annum, while saying privately that they now have no choice but to
withdraw insurance cover from parties who face these risks.
The contrast between this reality and projections in the Stern Report is
all too apparent. Like Sir David King before him, Sir Nicholas Stern
acknowledges that while for reasons of climate safety we should be
aiming to stabilise at 450 CO2 e ppmv, stabilising at 550 ppmv is the
aspirational best we can hope for and is achievable by spending merely
1% of GDP on mitigating ghg emissions. The idea that 1% of GDP bails us
out of this, borders on the fantastical.
The difference between 450 and 550 ppmv as a concentration outcome is no
mere 'margin of error'. It is the difference between repeating twice or
three times the entire weight of emissions emitted in the first 200
years of the industrial revolution. To date we have emitted a quarter of
a trillion tonnes carbon from mining and burning that much oil coal and
gas. This has raised concentrations from below 280 ppmv CO2 to over 420
CO2 equivalent ppmv and temperature by nearly one degree over the last
two hundred years. Stern's report now foresees emitting this again more
than three times to a total of one and a quarter trillion tonnes of
carbon equivalent over the next century, to the aggravated hazard of a
550 ppmv outcome because of another three quarters of a trillion tonnes
of carbon-equivalent being pumped into the sky.
What makes Stern’s prognosis so unreliable is that no real recognition
is given to increasing sink-failure. The average annual value for
concentrations has been accelerating in recent years. While greenhouse
gas emissions from human sources are still increasing, the fraction of
these retained in the atmosphere has been increasing as well as, at the
same time, the natural sinks for CO2 have started to fail. The odds are
that progressively the entire weight of carbon from these emissions will
be transferred to the atmosphere permanently. This risk is aggravated
further by the interaction with other positive feedbacks to temperature
rise such as methane release and albedo loss due to ice melt. On present
trends, this value of 450 ppmv CO2 e will be exceeded within ten years
and beyond then, investors will see mounting losses as global climate
impacts rise out of control. Insurers won’t provide insurance AND
investors won't invest.
Without the robust framework that C&C provides we will hit the rocks,
like a ship with everything in place bar the rudder and the compass. The
resistance to such a framework, especially in the developed world is
only explicable if one imagines governments to be in a state of
self-delusion, fearful of cold, rational number crunching. This is
cognitive dissonance on a suicidal scale, and at the very least one
might ask that C&C should be examined in the COP-12 process – or demand
that a better be placed on the table. Unless this challenge is taken up,
we will pursue a partial solution, which in climate change terms is not
solution at all.â€
