Curbing global warming won't bankrupt economy

Aggressive measures would only trim annual world growth by 0.12 percent, new report says. But will politicians go along?

from the May 7, 2007 edition

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To be sure, the efforts come at a cost to economic growth. The biggest gains happen when nations begin to impose taxes or regulations that boost the price of carbon-dioxide emissions to $100 a ton, according to the report's authors. By some estimates, that translates into US gasoline prices from 25 cents to $1 a gallon higher than today's.

But in the context of global economic activity, the cost is modest, according to the report. It's most aggressive emissions-reduction scenario would slow still-respectable growth rates by an average of 0.12 percent a year between now and 2030 – or by roughly 3 percent over the entire period.

From the administration's perspective, the results validate President Bush's reliance on new technologies to achieving his goal of reducing the country's carbon "intensity." The White House's goal: cut 18 percent per unit of gross domestic product by 2012.

The report "really highlights the importance of deploying a portfolio of clean-energy technologies globally," said Harlan Watson, who headed the US delegation to last week's negotiations in Bangkok. "It's totally consistent with President Bush's approach to addressing climate change." But others add the administration can find little solace in other respects of the report. It places little value on carbon intensity as a benchmark for progress, since even a more efficient economy can still pump more CO2 into the atmosphere.

"You can use an intensity number as long as your intensity decrease is bigger than your economic growth, because that would mean net reductions in emissions," says Jonathan Pershing, an economist with the World Resources Institute in Washington.

Indeed, carbon intensity in the industrial world has been falling for some time, Dr. Metz adds, because of "business as usual" investments in energy efficiency. But CO2 emissions have still grown, in addition to what many see as the worrisome rise in emissions from developing countries, particularly China and India.

While voluntary approaches can lead to measurable emissions reductions, they hold little hope for emissions reductions beyond "business as usual," the report says.

Thus, the report is expected to add impetus to efforts in the US Congress to take more aggressive action against global warming. Yet the IPCC's smorgasbord of solutions includes provisions that have the potential to pit industries – and even environmental groups – against each other. Already, several environmental groups have criticized the report's inclusion of nuclear energy as a helpful technology.

Biofuels present another flash point among environmental groups. Several groups see strong climate and energy-security reasons for shifting from petroleum-based transportation fuels to ethanol or biodiesel. But a statement from one coalition of environmentalists, largely based in Europe, roundly condemns the IPCC's biofuels option as "a climate disaster in the making."

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