The heat is on
The heat is on The heat is on
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<str<strong>on</strong>g>The</str<strong>on</strong>g> <str<strong>on</strong>g>heat</str<strong>on</strong>g> <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong><br />
A survey of climate change l September 9th 2006<br />
Republicati<strong>on</strong>, copying or red<str<strong>on</strong>g>is</str<strong>on</strong>g>tributi<strong>on</strong> by any means <str<strong>on</strong>g>is</str<strong>on</strong>g> expressly prohibited without the prior written perm<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong> of <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t
<str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006 A survey of climate change 1<br />
Also in th<str<strong>on</strong>g>is</str<strong>on</strong>g> secti<strong>on</strong><br />
In the loop<br />
Warming may set o mechan<str<strong>on</strong>g>is</str<strong>on</strong>g>ms that make it<br />
warmer still. Page 2<br />
Those in peril by the sea<br />
Two of the big r<str<strong>on</strong>g>is</str<strong>on</strong>g>ks from climate change are a<br />
shutdown of the Gulf Stream and a r<str<strong>on</strong>g>is</str<strong>on</strong>g>e in sea<br />
levels. Page 3<br />
Bringing back the barley<br />
Mild weather in Greenland pleases some but<br />
not others. Page 4<br />
Reaping the whirlwind<br />
Hurricanes used to be thought unc<strong>on</strong>nected<br />
to climate change. Now a link <str<strong>on</strong>g>is</str<strong>on</strong>g> emerging.<br />
Page 5<br />
Where the wild things are<br />
Not where they used to be, as the world gets<br />
warmer. Page 7<br />
D<str<strong>on</strong>g>is</str<strong>on</strong>g>mal calculati<strong>on</strong>s<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> ec<strong>on</strong>omics of living with climate<br />
changeor mitigating it. Page 8<br />
Selling hot air<br />
Kyoto’s main achievement was to create a<br />
market in carb<strong>on</strong>. It’s awed, but better than<br />
nothing. Page 10<br />
Anti-hero<br />
Within a decade, China will emit more greenhouse<br />
gases than any other country. Page 11<br />
A coat of green<br />
Business <str<strong>on</strong>g>is</str<strong>on</strong>g> becoming more envir<strong>on</strong>mentminded,<br />
but <strong>on</strong>ly because government <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
pushing. Page 12<br />
Doing it their way<br />
American attitudes to global warming are<br />
complex, and are changing. Page 14<br />
Where to start<br />
Technological and ec<strong>on</strong>omic soluti<strong>on</strong>s to climate<br />
change are available. <str<strong>on</strong>g>The</str<strong>on</strong>g> problem <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
politics. Page 15<br />
A l<str<strong>on</strong>g>is</str<strong>on</strong>g>t of sources can be found <strong>on</strong>line<br />
www.ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t.com/surveys<br />
An audio interview with the author <str<strong>on</strong>g>is</str<strong>on</strong>g> at<br />
www.ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t.com/audio<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> <str<strong>on</strong>g>heat</str<strong>on</strong>g> <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong><br />
Global warming, it now seems, <str<strong>on</strong>g>is</str<strong>on</strong>g> for real. Emma Duncan examines the<br />
nature of the problem, and possible soluti<strong>on</strong>s<br />
THE world’s climate has barely changed<br />
since the industrial revoluti<strong>on</strong>. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
temperature was stable in the 19th century,<br />
rose very slightly during the rst half<br />
of the 20th, fell back in the 1950s-70s, then<br />
started r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing again. Over the past 100<br />
years, it has g<strong>on</strong>e up by about 0.6°C (1.1°F).<br />
So what’s the fuss about? Not so much<br />
the r<str<strong>on</strong>g>is</str<strong>on</strong>g>e in temperature as the reas<strong>on</strong> for it.<br />
Previous changes in the world’s climate<br />
have been set o by variati<strong>on</strong>s either in the<br />
angle of the Earth’s rotati<strong>on</strong> or in its d<str<strong>on</strong>g>is</str<strong>on</strong>g>tance<br />
from the sun. Th<str<strong>on</strong>g>is</str<strong>on</strong>g> time there <str<strong>on</strong>g>is</str<strong>on</strong>g> another<br />
factor involved: man-made greenhouse<br />
gases.<br />
When the sun’s energy hits the Earth,<br />
most of it bounces back into space. But carb<strong>on</strong><br />
dioxide and around 30 other greenhouse<br />
gases, such as methane, help create<br />
a layer that traps some of the <str<strong>on</strong>g>heat</str<strong>on</strong>g> from the<br />
sun, thus warming the planet. And, because<br />
of the burning of fossil fuels, which<br />
c<strong>on</strong>tain the CO2 that the original plants<br />
breathed in from the atmosphere, levels of<br />
CO2 have increased from around 280 parts<br />
per milli<strong>on</strong> (ppm) before the industrial<br />
revoluti<strong>on</strong> to around 380ppm now. Studies<br />
of ice cores show that c<strong>on</strong>centrati<strong>on</strong>s<br />
have not been so high for nearly half a milli<strong>on</strong><br />
years. At the current rate of increase,<br />
they will have reached 800ppm by the end<br />
of th<str<strong>on</strong>g>is</str<strong>on</strong>g> century. Given that CO2 being emitted<br />
now stays in the atmosphere for up to<br />
200 years, getting those c<strong>on</strong>centrati<strong>on</strong>s<br />
down will take a l<strong>on</strong>g time.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> rst pers<strong>on</strong> to spot the c<strong>on</strong>necti<strong>on</strong><br />
between temperature and human activity<br />
was a 19th-century scient<str<strong>on</strong>g>is</str<strong>on</strong>g>t called Svante<br />
Arrhenius. He speculated that em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
from industry could double CO 2 levels in<br />
3,000 years, thus warming the planet. Being<br />
a Swede, he thought that was just ne.<br />
In 1938 a Brit<str<strong>on</strong>g>is</str<strong>on</strong>g>h engineer called Guy Callendar<br />
gave a talk to the Royal Meteorological<br />
Society in which he claimed to have establ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed<br />
that the world was warming, but<br />
he was regarded as an eccentric. <str<strong>on</strong>g>The</str<strong>on</strong>g> idea<br />
of global warming seemed bound for the<br />
intellectual dustbin.<br />
Chill out<br />
If interest in climate change was lukewarm<br />
in the rst half of the 20th century, it went<br />
d<str<strong>on</strong>g>is</str<strong>on</strong>g>tinctly chilly in the sec<strong>on</strong>d half, for the<br />
good reas<strong>on</strong> that the world was getting<br />
cooler. In 1975 Newsweek magazine ran a<br />
cover story entitled <str<strong>on</strong>g>The</str<strong>on</strong>g> Cooling World<br />
that gave warning of a drastic decline in<br />
food producti<strong>on</strong>with serious political<br />
implicati<strong>on</strong>s for just about every nati<strong>on</strong> <strong>on</strong><br />
Eartha predicti<strong>on</strong> repeated with understandable<br />
glee by those who suspect the<br />
current worry <str<strong>on</strong>g>is</str<strong>on</strong>g> just another such scare.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> mid-20th-century blip turns out to 1<br />
.....................................................................<br />
Th<str<strong>on</strong>g>is</str<strong>on</strong>g> survey, which generated about 118 t<strong>on</strong>nes of<br />
carb<strong>on</strong> dioxide from ights, car journeys, paper<br />
producti<strong>on</strong>, printing and d<str<strong>on</strong>g>is</str<strong>on</strong>g>tributi<strong>on</strong>, has been carb<strong>on</strong>neutral<str<strong>on</strong>g>is</str<strong>on</strong>g>ed<br />
through the Carb<strong>on</strong> Neutral Company. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
cost was £590; the m<strong>on</strong>ey was spent <strong>on</strong> capturing<br />
methane from an American mine.
2 A survey of climate change <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006<br />
2 have been the c<strong>on</strong>sequence of another byproduct<br />
of human activity: sulphur and<br />
other airborne particles that bounce back<br />
sunlight before it can hit the Earth, thus osetting<br />
the greenhouse eect. By the late<br />
20th century, eorts to c<strong>on</strong>trol that sort of<br />
polluti<strong>on</strong> were having an eect. <str<strong>on</strong>g>The</str<strong>on</strong>g> particulate<br />
c<strong>on</strong>tent of the atmosphere was<br />
falling, and the world began to <str<strong>on</strong>g>heat</str<strong>on</strong>g> up<br />
<strong>on</strong>ce more. <str<strong>on</strong>g>The</str<strong>on</strong>g> idea of global warming<br />
was retrieved from the bin and turned into<br />
<strong>on</strong>e of the biggest arguments of our time.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> debate involves scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts, ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts,<br />
politicians and anybody interested<br />
in the future of the planet. It <str<strong>on</strong>g>is</str<strong>on</strong>g> charged by<br />
the belief <strong>on</strong> <strong>on</strong>e side that life as we know<br />
it <str<strong>on</strong>g>is</str<strong>on</strong>g> under threat, and by the c<strong>on</strong>victi<strong>on</strong> <strong>on</strong><br />
the other that scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts and social<str<strong>on</strong>g>is</str<strong>on</strong>g>ts are<br />
c<strong>on</strong>spiring to spend taxpayers’ m<strong>on</strong>ey <strong>on</strong> a<br />
bogey. It <str<strong>on</strong>g>is</str<strong>on</strong>g> sharpened by a moral angle<br />
the sense, deep at the heart of the envir<strong>on</strong>mental<br />
movement, that the c<strong>on</strong>sequence<br />
of individual selshness will be collective<br />
doom: the inv<str<strong>on</strong>g>is</str<strong>on</strong>g>ible hand <str<strong>on</strong>g>is</str<strong>on</strong>g> a st, and original<br />
sin an SUV.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> argument <str<strong>on</strong>g>is</str<strong>on</strong>g> peopled by big characters:<br />
James Lovelock, a Brit<str<strong>on</strong>g>is</str<strong>on</strong>g>h scient<str<strong>on</strong>g>is</str<strong>on</strong>g>t<br />
who believes that mankind has fatefully<br />
unbalanced the delicate mechan<str<strong>on</strong>g>is</str<strong>on</strong>g>ms of a<br />
world he calls Gaia; Bjorn Lomborg, a hyperactive<br />
Dan<str<strong>on</strong>g>is</str<strong>on</strong>g>h stat<str<strong>on</strong>g>is</str<strong>on</strong>g>tician who believes<br />
that scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts are tw<str<strong>on</strong>g>is</str<strong>on</strong>g>ting gures to scare<br />
people; Arnold Schwarzenegger, the gov-<br />
In the loop<br />
THE baing complexity of the climateand<br />
thus the diculty of predicting<br />
what <str<strong>on</strong>g>is</str<strong>on</strong>g> going to happen to<br />
itar<str<strong>on</strong>g>is</str<strong>on</strong>g>es principally from its feedback<br />
loops. Scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts are nding out about<br />
ever more of them, which <str<strong>on</strong>g>is</str<strong>on</strong>g> why things<br />
d<strong>on</strong>’t seem to be getting much clearer<br />
over time.<br />
Feedback loops may be either positive,<br />
thus reinforcing warming, or negative,<br />
countering it. Most of the main <strong>on</strong>es<br />
scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts have identied are positive; others<br />
are little understood and might go either<br />
way.<br />
Feedback <str<strong>on</strong>g>is</str<strong>on</strong>g> the source of the scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts’<br />
biggest worry. Looking at previous<br />
ep<str<strong>on</strong>g>is</str<strong>on</strong>g>odes of dramatic climate change,<br />
they reck<strong>on</strong> that a bit of warming may set<br />
o mechan<str<strong>on</strong>g>is</str<strong>on</strong>g>ms that lead to much more<br />
It’s not natural<br />
Actual temperature change and change<br />
predicted by modelling natural variati<strong>on</strong>s<br />
in solar and volcanic activity, °C<br />
Model<br />
Actual<br />
1.0<br />
0.8<br />
0.6<br />
0.4<br />
0.2<br />
+<br />
0<br />
–<br />
0.2<br />
0.4<br />
1850<br />
Source: IPCC<br />
1900 1950 2000<br />
ernor of California, whose m<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> to<br />
terminate climate change; and James Inhofe,<br />
chairman of the envir<strong>on</strong>ment and<br />
public works committee in America’s Senate,<br />
who says it <str<strong>on</strong>g>is</str<strong>on</strong>g> all n<strong>on</strong>sense.<br />
Unfortunately, the argument <str<strong>on</strong>g>is</str<strong>on</strong>g> also fuelled<br />
by ignorance, because nobody<br />
knows for sure what <str<strong>on</strong>g>is</str<strong>on</strong>g> happening to the<br />
climate. At a macro level, modelling what<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong>e of the world’s most complex mechan<str<strong>on</strong>g>is</str<strong>on</strong>g>ms<br />
(see box below) and projecting 100<br />
years ahead <str<strong>on</strong>g>is</str<strong>on</strong>g> tricky. At a micro level,<br />
individual pieces of data c<strong>on</strong>tradict each<br />
other. One shrinking glacier can be countered<br />
by another that <str<strong>on</strong>g>is</str<strong>on</strong>g> growing; <strong>on</strong>e area<br />
warming; and that <strong>on</strong>ce that starts happening,<br />
mankind will lose the opportunity<br />
to c<strong>on</strong>trol the pace of change. Am<strong>on</strong>g<br />
the main feedback loops are:<br />
Albedothe tendency to reect rather<br />
than absorb light. White areas reect sunlight<br />
and dark areas absorb it, so as ice<br />
melts and the Earth’s albedo decreases,<br />
the world absorbs more energy and<br />
warms up even more.<br />
Ocean absorpti<strong>on</strong>. <str<strong>on</strong>g>The</str<strong>on</strong>g> sea absorbs<br />
CO 2. Colder seas absorb more than<br />
warmer <strong>on</strong>es, so as they warm they will<br />
tend to absorb less, leaving more in the<br />
atmosphere.<br />
Soil respirati<strong>on</strong>. <str<strong>on</strong>g>The</str<strong>on</strong>g> soil emits CO 2.<br />
Warming may lead to an exp<strong>on</strong>ential r<str<strong>on</strong>g>is</str<strong>on</strong>g>e<br />
in microbial activity, which would cause<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s to r<str<strong>on</strong>g>is</str<strong>on</strong>g>e faster than the increase<br />
1<br />
of dimin<str<strong>on</strong>g>is</str<strong>on</strong>g>hing precipitati<strong>on</strong> can be answered<br />
by another where it <str<strong>on</strong>g>is</str<strong>on</strong>g> r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing.<br />
Ignorance and fear have spawned an<br />
industry. Governments, internati<strong>on</strong>al<br />
bureaucracies and universities are employing<br />
many thousands of clever people<br />
to work out what <str<strong>on</strong>g>is</str<strong>on</strong>g> going <strong>on</strong>. Foundati<strong>on</strong>s<br />
are pouring m<strong>on</strong>ey into research. Big corporati<strong>on</strong>s<br />
now all have high-level climatechange<br />
adv<str<strong>on</strong>g>is</str<strong>on</strong>g>ers with teams of clever<br />
young things scurrying around to nd out<br />
what the scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts are thinking and what<br />
the politicians are planning to do.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> establ<str<strong>on</strong>g>is</str<strong>on</strong>g>hment of an Intergovernmental<br />
Panel <strong>on</strong> Climate Change under<br />
the auspices of the UN was designed to silence<br />
the arguments and give policymakers<br />
an agreed line <strong>on</strong> what the future holds.<br />
But given how little <str<strong>on</strong>g>is</str<strong>on</strong>g> known about either<br />
the climate’s sensitivity to greenhouse-gas<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s or about future em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s levels,<br />
that proved dicult. Not surpr<str<strong>on</strong>g>is</str<strong>on</strong>g>ingly,<br />
the IPCC’s latest report, publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed in 2001,<br />
oers a wide range of predicted temperature<br />
r<str<strong>on</strong>g>is</str<strong>on</strong>g>es, from 1.4°C to 5.8°C by the end of<br />
th<str<strong>on</strong>g>is</str<strong>on</strong>g> century.<br />
Th<str<strong>on</strong>g>is</str<strong>on</strong>g> huge range limits the usefulness of<br />
the IPCC’s ndings to policymakers. Nor<br />
has the panel’s ex<str<strong>on</strong>g>is</str<strong>on</strong>g>tence quietened the debate.<br />
Sceptic<str<strong>on</strong>g>is</str<strong>on</strong>g>m about its science and especially<br />
its ec<strong>on</strong>omics has led a number of<br />
people to d<str<strong>on</strong>g>is</str<strong>on</strong>g>agree with its ndings. Some<br />
challenge the evidence that climate1<br />
Warming may set o mechan<str<strong>on</strong>g>is</str<strong>on</strong>g>ms<br />
that make it warmer still<br />
in vegetati<strong>on</strong> could absorb them. <str<strong>on</strong>g>The</str<strong>on</strong>g>re <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
a particular worry about greenhouse<br />
gases in tundra around the Arctic: if the<br />
tundra melted, they would start to be<br />
released.<br />
Clouds. Whether the feedback from<br />
clouds <str<strong>on</strong>g>is</str<strong>on</strong>g> positive or negative <str<strong>on</strong>g>is</str<strong>on</strong>g> the source<br />
of a big argument am<strong>on</strong>g scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts. Professor<br />
Richard Lindzen at the Massachusetts<br />
Institute of Technology, <strong>on</strong>e of the<br />
few remaining serious scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts who<br />
doubt that climate change <str<strong>on</strong>g>is</str<strong>on</strong>g> a problem,<br />
believes in what he calls the ir<str<strong>on</strong>g>is</str<strong>on</strong>g> eect:<br />
that, just as the eye’s ir<str<strong>on</strong>g>is</str<strong>on</strong>g> closes up when a<br />
bright light <str<strong>on</strong>g>is</str<strong>on</strong>g> sh<strong>on</strong>e up<strong>on</strong> it, so a warmer<br />
world will produce more water vapour<br />
which will form clouds and block out<br />
sunlight. Others argue that the clouds<br />
thus formed will merely shut in the <str<strong>on</strong>g>heat</str<strong>on</strong>g>.
<str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006 A survey of climate change 3<br />
2 change <str<strong>on</strong>g>is</str<strong>on</strong>g> happening; others accept that it<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> happening, but argue that it <str<strong>on</strong>g>is</str<strong>on</strong>g>n’t worth<br />
trying to do anything about it.<br />
Since that IPCC report ve years ago,<br />
the science has tended to c<strong>on</strong>rm the idea<br />
that something serious <str<strong>on</strong>g>is</str<strong>on</strong>g> happening. In<br />
the 1990s, satellite data seemed to c<strong>on</strong>tradict<br />
the terrestrial data that showed temperatures<br />
r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing. <str<strong>on</strong>g>The</str<strong>on</strong>g> d<str<strong>on</strong>g>is</str<strong>on</strong>g>parity puzzled scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts<br />
and fuelled sceptic<str<strong>on</strong>g>is</str<strong>on</strong>g>m. <str<strong>on</strong>g>The</str<strong>on</strong>g> satellite<br />
data, it turned out, were wr<strong>on</strong>g: having<br />
been put right, they now agree with terrestrial<br />
data that things are hotting up. Ob-<br />
Those in peril by the sea<br />
ASVERDRUP, the unit in which ocean<br />
currents are measured, <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong>e milli<strong>on</strong><br />
cubic metres of water per sec<strong>on</strong>d. <str<strong>on</strong>g>The</str<strong>on</strong>g> Gulf<br />
Stream, the northern part of a circulati<strong>on</strong><br />
system known as the North Atlantic Gyre,<br />
reaches 150 Sverdrups at its peak. On average,<br />
it ows at around 100 Sverdrups.<br />
North of Britain, where the surrounding<br />
water temperature <str<strong>on</strong>g>is</str<strong>on</strong>g> around zero, the Gulf<br />
Stream <str<strong>on</strong>g>is</str<strong>on</strong>g> around 8°C. With its huge volumes<br />
and its sharp temperature dierence<br />
to surrounding waters, it carries so much<br />
tropical <str<strong>on</strong>g>heat</str<strong>on</strong>g> from the mid-Atlantic to<br />
western Europe that Norway’s coastline <str<strong>on</strong>g>is</str<strong>on</strong>g>,<br />
in winter, 20°C warmer than similar latitudes<br />
in Canada.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> prospects for the Gulf Stream are<br />
therefore of c<strong>on</strong>siderable interest not just<br />
to climatolog<str<strong>on</strong>g>is</str<strong>on</strong>g>ts but also to farmers, businessmen,<br />
politicians and any western Europeans<br />
who prefer mild winters to the<br />
prospect of living somewhere like Newfoundland.<br />
So a recent paper suggesting<br />
that it was slowing down aroused plenty<br />
of interest.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> Gulf Stream <str<strong>on</strong>g>is</str<strong>on</strong>g> driven both by the<br />
rotati<strong>on</strong> of the Earth and by a deep-water<br />
current called the <str<strong>on</strong>g>The</str<strong>on</strong>g>rmohaline Circulati<strong>on</strong>.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> THC pulls warm salty water from<br />
the tropics northwards. It gradually loses<br />
<str<strong>on</strong>g>heat</str<strong>on</strong>g> as it does so and, as it approaches the<br />
Arctic, begins to sink because it <str<strong>on</strong>g>is</str<strong>on</strong>g> saltier,<br />
and therefore heavier, than the surrounding<br />
water. As it sinks, it pulls in more warm<br />
water from the tropics. <str<strong>on</strong>g>The</str<strong>on</strong>g> deeper, colder<br />
water returns to the tropics through the<br />
Deep Southerly Return Flow, which<br />
passes by Florida, and the Subtropical Recirculati<strong>on</strong>,<br />
which curls round the west<br />
coast of Africa.<br />
servati<strong>on</strong>s about what <str<strong>on</strong>g>is</str<strong>on</strong>g> happening to the<br />
climate have tended to c<strong>on</strong>rm, or run<br />
ahead of, what the models predicted<br />
would happen. Arctic sea ice, for instance,<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> melting unexpectedly fast, at 9% a decade.<br />
Glaciers are melting surpr<str<strong>on</strong>g>is</str<strong>on</strong>g>ingly<br />
swiftly. And a range of phenomena, such<br />
as hurricane activity, that were previously<br />
thought to be unc<strong>on</strong>nected to climate<br />
change are now increasingly linked to it.<br />
Th<str<strong>on</strong>g>is</str<strong>on</strong>g> survey will argue that although<br />
the science remains uncertain, the chances<br />
of serious c<strong>on</strong>sequences are high enough<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g>re are good reas<strong>on</strong>s to be nervous<br />
about the Gulf Stream’s future, because it<br />
has not been reliable in the past. Since the<br />
most recent ice age 20,000 years ago, it has<br />
packed up several timesmost recently, it<br />
seems, around 8,200 years ago, when a<br />
sudden ood of fresh water from a North<br />
American lake tipped into the North Atlantic.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> fresh water seems to have diluted<br />
the Gulf Stream’s saltiness and thus weakened<br />
its ow.<br />
That, fear climate-change watchers, <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
what could happen as the Arctic ice melts.<br />
But the models did not predict that it<br />
would start happening yet, which <str<strong>on</strong>g>is</str<strong>on</strong>g> why<br />
the climatological world sat up when a paper<br />
was publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed last year claiming that<br />
the ow appeared to be slowing.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> paper, by Harry Bryden and some<br />
to make it worth spending the (not exorbitant)<br />
sums needed to try to mitigate climate<br />
change. It will suggest that, even<br />
though America, the world’s biggest CO 2<br />
emitter, turned its back <strong>on</strong> the Kyoto protocol<br />
<strong>on</strong> global warming, the chances are<br />
that it will eventually take steps to c<strong>on</strong>trol<br />
its em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s. And if America does, there <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
a reas<strong>on</strong>able prospect that the other big<br />
producers of CO 2 will do the same.<br />
But rst, to the science, and some of the<br />
recent ndings that have sharpened people’s<br />
worries. 7<br />
Two of the big r<str<strong>on</strong>g>is</str<strong>on</strong>g>ks from climate change are a shutdown of the Gulf Stream and a r<str<strong>on</strong>g>is</str<strong>on</strong>g>e in sea levels<br />
colleagues at Britain’s Nati<strong>on</strong>al Oceanography<br />
Centre in Southampt<strong>on</strong>, was based<br />
<strong>on</strong> ve sets of measurements of the THC<br />
taken over half a century. <str<strong>on</strong>g>The</str<strong>on</strong>g> rst three<br />
showed no d<str<strong>on</strong>g>is</str<strong>on</strong>g>cernible change in its speed;<br />
but results in 1998 and again in 2004 suggested<br />
a noticeable slowing, which Dr Bryden<br />
and h<str<strong>on</strong>g>is</str<strong>on</strong>g> colleagues estimate at 30% of<br />
the current’s volume.<br />
Some scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts, such as MIT’s Professor<br />
Carl Wunsch, cauti<strong>on</strong> against drawing<br />
c<strong>on</strong>clusi<strong>on</strong>s from so few data points. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
oceans are like the atmosphere. <str<strong>on</strong>g>The</str<strong>on</strong>g> system<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> exceedingly no<str<strong>on</strong>g>is</str<strong>on</strong>g>y. You get weather<br />
in the oceans like you get weather in the atmosphere.<br />
Th<str<strong>on</strong>g>is</str<strong>on</strong>g> paper <str<strong>on</strong>g>is</str<strong>on</strong>g> based <strong>on</strong> ve<br />
crossings of the Atlantic over 47 years. It’s<br />
as though you went out <strong>on</strong> ve dierent<br />
occasi<strong>on</strong>s in ve dierent places in North<br />
America over half a century and measured<br />
the wind speed. You say there’s a<br />
trend. <str<strong>on</strong>g>The</str<strong>on</strong>g>re’s a trend in your gures, but<br />
you have no evidence of a secular trend.<br />
Much of the community would say you<br />
have ve data points.<br />
Professor Wunsch <str<strong>on</strong>g>is</str<strong>on</strong>g> not a climatechange<br />
sceptic. He believes that there will<br />
be serious future climate change: it’s almost<br />
guaranteed, and he thinks there<br />
should be attempts to mitigate it. But he <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
fed up with too much being read into thin<br />
research.<br />
Although the data about what <str<strong>on</strong>g>is</str<strong>on</strong>g> happening<br />
now may not be solid enough to<br />
bear too much interpretati<strong>on</strong>, the models’<br />
predicti<strong>on</strong>s are not reassuring either. A paper<br />
by scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts from the Hadley Research<br />
Centre of Britain’s Meteorological Oce<br />
and others, presented earlier th<str<strong>on</strong>g>is</str<strong>on</strong>g> year at a<br />
symposium <strong>on</strong> Avoiding Dangerous Cli-1
4 A survey of climate change <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006<br />
2<br />
Now you see it, now you d<strong>on</strong>’t: Blomstrandbreen glacier, Norway, 1918 and 2002<br />
mate Change, rated a shutdown of the<br />
Gulf Stream over the next century as unlikely,<br />
but reck<strong>on</strong>ed that a slowdown of<br />
up to 50% was likely. Another paper presented<br />
at the same meeting saw a two-inthree<br />
chance that it would shut down over<br />
the next 200 years.<br />
How much would a shut-down matter?<br />
That <str<strong>on</strong>g>is</str<strong>on</strong>g> another thing that the big guns<br />
of climate change d<str<strong>on</strong>g>is</str<strong>on</strong>g>agree <strong>on</strong>. You could<br />
have icebergs around Britain, says David<br />
Griggs, director of climate research at Britain’s<br />
Met Oce. Daniel Schrag, professor<br />
of geochem<str<strong>on</strong>g>is</str<strong>on</strong>g>try at Harvard’s department<br />
of Earth and planetary sciences, has a different<br />
take. Models that predict THC shutdown<br />
caused by warming never produce<br />
overall cooling, but <strong>on</strong>ly reduce the warming<br />
eect in coastal areas of Scotland and<br />
Scandinavia.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> other marine subject that has<br />
caught people’s attenti<strong>on</strong> recently <str<strong>on</strong>g>is</str<strong>on</strong>g> the<br />
Bringing back the barley<br />
THE Middle Ages were unusually<br />
warm in northern Europe, and it was<br />
during that period that the Vikings settled<br />
in Greenland. <str<strong>on</strong>g>The</str<strong>on</strong>g>y cultivated land, growing<br />
mostly barley. <str<strong>on</strong>g>The</str<strong>on</strong>g> climate then<br />
cooled down, which made the place too<br />
chilly for arable farming. <str<strong>on</strong>g>The</str<strong>on</strong>g>se days<br />
Greenland’s 56,000 people rely largely <strong>on</strong><br />
sheep farming in the south, hunting in the<br />
north and shing in the west.<br />
Or at least they did until the world<br />
started warming up again. Average temperatures<br />
in Greenland have r<str<strong>on</strong>g>is</str<strong>on</strong>g>en by<br />
1.5°C over the past 30 years. <str<strong>on</strong>g>The</str<strong>on</strong>g> barley <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
back. Kenneth Hoeth has been growing it,<br />
but <strong>on</strong>ly as an experiment. Several farmers<br />
in southern Greenland are now farming<br />
potatoes, turnips and iceberg lettuces<br />
r<str<strong>on</strong>g>is</str<strong>on</strong>g>e in sea levels. So far th<str<strong>on</strong>g>is</str<strong>on</strong>g> has been relatively<br />
small, but if it accelerates, it could become<br />
the most serious c<strong>on</strong>sequence of climate<br />
change.<br />
Brimming over<br />
In March 2002 Ted Scambos, a scient<str<strong>on</strong>g>is</str<strong>on</strong>g>t<br />
from the University of Colorado, was<br />
examining images from NASA’s Mod<str<strong>on</strong>g>is</str<strong>on</strong>g> satellite<br />
and noticed something odd going <strong>on</strong><br />
at the Larsen B ice shelf (a oating extensi<strong>on</strong><br />
of a glacier) <strong>on</strong> the Antarctic Peninsula<br />
in the west of the c<strong>on</strong>tinent. He<br />
alerted the Brit<str<strong>on</strong>g>is</str<strong>on</strong>g>h Antarctic Survey in<br />
Cambridge, which sent a ship over to have<br />
a look. Meanwhile, an Argentine glaciolog<str<strong>on</strong>g>is</str<strong>on</strong>g>t<br />
based in Antarctica, Pedro Skvarca,<br />
took an aeroplane over the shelf. That <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
how pictures of the rst recorded collapse<br />
of a big Antarctic ice shelf were obtained.<br />
Most of the ice in the Arctic <str<strong>on</strong>g>is</str<strong>on</strong>g> sea ice, so<br />
when it melts the sea level doesn’t change<br />
commercially. Mr Hoeth <str<strong>on</strong>g>is</str<strong>on</strong>g> trying out<br />
other crops: he <str<strong>on</strong>g>is</str<strong>on</strong>g> pleased with h<str<strong>on</strong>g>is</str<strong>on</strong>g> Chinese<br />
cabbage, which he says <str<strong>on</strong>g>is</str<strong>on</strong>g> particularly<br />
cr<str<strong>on</strong>g>is</str<strong>on</strong>g>py.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> weather has helped sheep farming,<br />
too. Sheep are kept in barns all winter<br />
and have to be fed with hay or other fodder.<br />
Because grass grows more plentifully<br />
these days, sheep farmers need to import<br />
less fodder, so costs have fallen. <str<strong>on</strong>g>The</str<strong>on</strong>g> <strong>on</strong>ly<br />
downside, says Mr Hoeth, <str<strong>on</strong>g>is</str<strong>on</strong>g> bugs: caterpillars<br />
are proliferating. But, he says, generally<br />
the warming <str<strong>on</strong>g>is</str<strong>on</strong>g> good for us.<br />
Not everybody in Greenland <str<strong>on</strong>g>is</str<strong>on</strong>g> so<br />
pleased, though. Hunters in the north,<br />
who catch narwhals, seals, walruses and<br />
polar bears, use dog sledges, which are<br />
tricky to use when the ice melts and the<br />
much. Ice in Greenland and Antarctica, by<br />
c<strong>on</strong>trast, <str<strong>on</strong>g>is</str<strong>on</strong>g> mostly <strong>on</strong> land. Greenland’s ice<br />
sheet <str<strong>on</strong>g>is</str<strong>on</strong>g> up to 3km (1.9 miles) thick; Antarctica’s<br />
4.2km. If all of Greenland’s ice were<br />
to melt, sea levels would r<str<strong>on</strong>g>is</str<strong>on</strong>g>e by around 7<br />
metres; if West Antarctica’s were to go, that<br />
would add another 6 metres; and if East<br />
Antarctica’s ice meltedwhich nobody<br />
thinks likely for the foreseeable futuresea<br />
levels would go up by a devastating further<br />
70 metres. Even a 1-metre r<str<strong>on</strong>g>is</str<strong>on</strong>g>e would<br />
ood 17% of Bangladesh’s land mass and<br />
cause serious problems for coastal cities<br />
such as L<strong>on</strong>d<strong>on</strong> and New York.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> sea level has varied sharply during<br />
the Earth’s h<str<strong>on</strong>g>is</str<strong>on</strong>g>tory. At the peak of the most<br />
recent ice age, around 18,000 years ago, it<br />
was 130 metres lower than it <str<strong>on</strong>g>is</str<strong>on</strong>g> now; but<br />
through most of the planet’s h<str<strong>on</strong>g>is</str<strong>on</strong>g>tory it has<br />
been much higher. Over the past 100<br />
years, it seems to have r<str<strong>on</strong>g>is</str<strong>on</strong>g>en, <strong>on</strong> average, by<br />
about 10-20cm, but measuring that accu- 1<br />
Mild weather in Greenland<br />
pleases some but not others<br />
soil <str<strong>on</strong>g>is</str<strong>on</strong>g> mushy. <str<strong>on</strong>g>The</str<strong>on</strong>g> weather <str<strong>on</strong>g>is</str<strong>on</strong>g> less predictable,<br />
too. Earlier, says Alfred Jacobsen,<br />
Greenland’s deputy min<str<strong>on</strong>g>is</str<strong>on</strong>g>ter for envir<strong>on</strong>ment<br />
and nature, local people could<br />
count <strong>on</strong> the weather. Now they d<strong>on</strong>’t<br />
know whether there will be a north<br />
wind, which brings stable weather, or a<br />
south <strong>on</strong>e, which brings snowstorms.<br />
And for the shermen in the west,<br />
who use big trawlers to catch shrimp, it<br />
could go either way. Ice can be a problem<br />
for us, says Jens Lyberth of the F<str<strong>on</strong>g>is</str<strong>on</strong>g>heries<br />
and Exports branch of the Greenland<br />
Employers’ Associati<strong>on</strong>. Less ice <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
less problem. And cod, which used to be<br />
plentiful until the 1960s, then d<str<strong>on</strong>g>is</str<strong>on</strong>g>appeared,<br />
are coming back; but cod eat the<br />
shrimp the shermen are after.
<str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006 A survey of climate change 5<br />
2 rately has proved surpr<str<strong>on</strong>g>is</str<strong>on</strong>g>ingly hard.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> sea <str<strong>on</strong>g>is</str<strong>on</strong>g> not like a bath. If you pour<br />
water in at <strong>on</strong>e end, it does not necessarily<br />
spread itself evenly. Sea levels are currently<br />
falling in the northern Pacic, the<br />
north-west Indian Ocean and near Antarctica;<br />
they are r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing over most of the tropics<br />
and subtropics. That <str<strong>on</strong>g>is</str<strong>on</strong>g> because some seas<br />
are warming (and hence expanding) and<br />
some cooling (and hence c<strong>on</strong>tracting), and<br />
because the wind shifts water around.<br />
At the same time, land <str<strong>on</strong>g>is</str<strong>on</strong>g> moving up<br />
and down, because parts of the northern<br />
hem<str<strong>on</strong>g>is</str<strong>on</strong>g>phere are still bouncing back from<br />
the weight of the ice sheets they were carrying<br />
20 millennia ago, and the southern<br />
parts of those c<strong>on</strong>tinents are going down<br />
as the northern parts go up. So Scandinavia<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing by around a metre a century;<br />
Loch Lom<strong>on</strong>d in Scotland <str<strong>on</strong>g>is</str<strong>on</strong>g> r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing by<br />
around 1mm a year; and L<strong>on</strong>d<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> sinking<br />
by about the same amount.<br />
Until 13 years ago, all the available data<br />
<strong>on</strong> sea levels were collected by hand from<br />
ancient tide-gauges. But in 1992 satellite<br />
data became available that allowed sea<br />
levels to be measured in the middle of the<br />
oceans as well as at their edges. Those data<br />
suggest that sea levels are currently r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing<br />
by around 3mm a year; land-based data<br />
suggest that the r<str<strong>on</strong>g>is</str<strong>on</strong>g>e accelerated from an<br />
average of around 2mm a year over the<br />
past century to 4mm in the 1990s.<br />
Sea levels are r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing for two reas<strong>on</strong>s<br />
because water expands as it warms, and<br />
because ice <str<strong>on</strong>g>is</str<strong>on</strong>g> melting. That <str<strong>on</strong>g>is</str<strong>on</strong>g> where Larsen<br />
B, and some new ndings from Greenland,<br />
come in.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> collapse of Larsen B was not, in itself,<br />
all that important. What matters <str<strong>on</strong>g>is</str<strong>on</strong>g> the<br />
relati<strong>on</strong>ship of ice shelves to the glacier<br />
and the ice sheet behind them. If ice<br />
Reaping the whirlwind<br />
CLIMATOLOGY was <strong>on</strong>ce a rather<br />
peaceful science, insulated by the<br />
l<strong>on</strong>g-term nature of its inquiries even from<br />
the passi<strong>on</strong>s aroused by weather forecasts.<br />
Now that it <str<strong>on</strong>g>is</str<strong>on</strong>g> being asked to predict the future<br />
of the world, it has understandably<br />
become politic<str<strong>on</strong>g>is</str<strong>on</strong>g>ed and argumentative.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> science of hurricanes <str<strong>on</strong>g>is</str<strong>on</strong>g> a case in<br />
point. Hurricanes are the main climatological<br />
hazard <strong>on</strong> America’s wealthy east<br />
coast, so predicting them and following<br />
sheets are cathedrals, says Richard Alley,<br />
a glaciolog<str<strong>on</strong>g>is</str<strong>on</strong>g>t at Penn State University, ice<br />
shelves are the ying buttresses that secure<br />
them. Ice shelves are especially vulnerable<br />
because there <str<strong>on</strong>g>is</str<strong>on</strong>g> water underneath<br />
them; and if the water warms, the ice<br />
shelves get thinner. Mr Alley reck<strong>on</strong>s that<br />
for every 1°C increase in water temperature,<br />
ice shelves shrink by 10 metres.<br />
Galloping glaciers<br />
Scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts knew that Larsen B was deteriorating,<br />
but had not expected what happened<br />
after it collapsed. It turned out to<br />
have been acting as a brake <strong>on</strong> the glaciers<br />
behind it. When it went, they started moving<br />
faster; and the faster they move, the<br />
faster they melt. According to data analysed<br />
by Dr Scambos, the four glaciers behind<br />
Larsen B were moving between two<br />
and six times as fast in 2003 as they were in<br />
2000. Another paper, by Eric Rignot, a<br />
NASA scient<str<strong>on</strong>g>is</str<strong>on</strong>g>t, showed speeds increasing<br />
by up to eight times. Even so, the pace remains<br />
glacial: before the shelf collapsed,<br />
the ice was travelling at a few hundred metres<br />
a year; after, at a couple of kilometres.<br />
In southern Greenland, too, change <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
afoot. Jakobshavn Isbrae, Greenland’s<br />
Hurricanes used to be thought unc<strong>on</strong>nected to climate change. Now a link <str<strong>on</strong>g>is</str<strong>on</strong>g> emerging<br />
their progress has l<strong>on</strong>g been a sizeable industry.<br />
That has been especially true since<br />
1995 when, after a quiet three decades, the<br />
frequency and intensity of hurricanes in<br />
the Atlantic picked up. Interest in them has<br />
been especially sharp since 2004, the most<br />
active year <strong>on</strong> record. <str<strong>on</strong>g>The</str<strong>on</strong>g> following <strong>on</strong>e,<br />
more turbulent still, brought Hurricane Katrina,<br />
which did more ec<strong>on</strong>omic damage<br />
than any previous weather event anywhere.<br />
So politicians, businessmen and<br />
largest glacier, which drains 6.5% of Greenland’s<br />
ice-sheet area, doubled its speed between<br />
1997 and 2003. It <str<strong>on</strong>g>is</str<strong>on</strong>g> so large that its<br />
c<strong>on</strong>tributi<strong>on</strong> to sea-level r<str<strong>on</strong>g>is</str<strong>on</strong>g>e <str<strong>on</strong>g>is</str<strong>on</strong>g> measurable:<br />
about 0.06mm a year, or roughly 4%<br />
of the rate of sea-level increase in the 20th<br />
century.<br />
However, the rate of glacier melt by itself<br />
does not determine sea levels. <str<strong>on</strong>g>The</str<strong>on</strong>g> big<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g>sue <str<strong>on</strong>g>is</str<strong>on</strong>g> the mass balance of ice in Greenland<br />
and Antarcticawhether, overall, ice<br />
sheets are growing or shrinking. <str<strong>on</strong>g>The</str<strong>on</strong>g>re are<br />
no signs of glaciers in northern Greenland<br />
or East Antarctica speeding up. In West<br />
Antarctica, <strong>on</strong>e of the three main outlets<br />
(which includes the glaciers behind Larsen<br />
B) seems to be speeding up, but another<br />
(the most volatile) may be slowing down.<br />
Meanwhile, snow falls <strong>on</strong> ice sheets, replacing<br />
some of the lost ice.<br />
Nobody knows what <str<strong>on</strong>g>is</str<strong>on</strong>g> happening to<br />
the mass balance of Antarctica. Greenland’s<br />
does seem to be shrinking very<br />
slightlyby around 0.4mm a year, in sealevel<br />
equivalent. That would be <strong>on</strong>ly 4cm a<br />
century, if the rate stayed c<strong>on</strong>stant. But<br />
there <str<strong>on</strong>g>is</str<strong>on</strong>g> no reas<strong>on</strong> to think that the rate will<br />
stay c<strong>on</strong>stantnor, if it did accelerate, that<br />
anything could be d<strong>on</strong>e to stop it. 7<br />
the public have all turned to hurricane scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts<br />
to tell them what <str<strong>on</strong>g>is</str<strong>on</strong>g> happening.<br />
But establ<str<strong>on</strong>g>is</str<strong>on</strong>g>hing trends in hurricane frequency<br />
and intensity <str<strong>on</strong>g>is</str<strong>on</strong>g> much more dicult<br />
than in temperature. Whereas temperature<br />
can be measured every day, all<br />
around the world, with hurricanes the<br />
data points are far fewer and further between.<br />
What’s more, the records before<br />
1970 are poor. Nevertheless, an increase in<br />
the number of storms in the 1940s and1
6 A survey of climate change <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006<br />
2 1960s, followed by a quiet period, and the<br />
subsequent increase in activity in the<br />
1990s, had led to the noti<strong>on</strong> of the Atlantic<br />
Multi-decadal Oscillati<strong>on</strong> (AMO), a littleunderstood<br />
cycle believed to be caused by<br />
changes in the ocean, which was resp<strong>on</strong>sible<br />
for hurricanes.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> AMO was widely accepted in the<br />
hurricane business. Climate models did<br />
not predict an increase in hurricane activity<br />
as a result of global warming, and the<br />
IPCC’s 2001 report said there was no evidence<br />
of a c<strong>on</strong>necti<strong>on</strong> between the two.<br />
But two inuential papers publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed in<br />
2005 argued otherw<str<strong>on</strong>g>is</str<strong>on</strong>g>e. One, by Peter<br />
Webster, Judith Curry and colleagues, said<br />
the data supported the idea that there was<br />
a l<strong>on</strong>g-term increase in the number of category<br />
four and ve (intense) hurricanes; the<br />
other, by Kerry Emanuel, professor of tropical<br />
meteorology and climate at MIT, suggested<br />
that the intensity of Atlantic storms<br />
had <strong>on</strong> average doubled over 30 years.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> Webster paper was a surpr<str<strong>on</strong>g>is</str<strong>on</strong>g>e, but<br />
Professor Emanuel’s came as a real shock.<br />
He <str<strong>on</strong>g>is</str<strong>on</strong>g> a big no<str<strong>on</strong>g>is</str<strong>on</strong>g>e in the hurricane world<br />
and had been a supporter of the AMO.<br />
Initially, he says, I was very enamoured<br />
of the idea of natural cycles. But we’ve<br />
g<strong>on</strong>e back to look at the data, and what<br />
you see <str<strong>on</strong>g>is</str<strong>on</strong>g> anything but a natural cycle.<br />
Oscillating theories<br />
Hurricanes are closely related to sea-surface<br />
temperatures. <str<strong>on</strong>g>The</str<strong>on</strong>g>se rose during the<br />
rst half of the 20th century, then fell back,<br />
then started r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing again in the 1970s. Hurricane<br />
activity followed the same pattern,<br />
which prompted the idea of the oscillati<strong>on</strong>.<br />
But Professor Emanuel now believes<br />
that what looked like an oscillati<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g>, in<br />
fact, a l<strong>on</strong>g-term trend, masked in the<br />
1950s-70s by an increase in atmospheric<br />
polluti<strong>on</strong> by particles such as sulphur that<br />
led to a period of global cooling. Now that<br />
sulphur levels have been reduced, atmospheric<br />
temperatures are <strong>on</strong> their way up<br />
againand so are sea-surface temperatures<br />
and hurricane activity.<br />
Not everybody agrees. Bill Gray, a professor<br />
of meteorology at Colorado State<br />
University, who runs a hurricane-forecasting<br />
centre and <str<strong>on</strong>g>is</str<strong>on</strong>g> the man America always<br />
turns to when a big hurricane threatens,<br />
doubts the methods of the climatolog<str<strong>on</strong>g>is</str<strong>on</strong>g>ts.<br />
I’m a great believer in computer models,<br />
he told the 27th C<strong>on</strong>ference <strong>on</strong> Tropical<br />
Meteorology earlier th<str<strong>on</strong>g>is</str<strong>on</strong>g> year. I amout to<br />
ten or 12 days. But when you get to the climate<br />
scale, you get into a can of worms.<br />
Any climate pers<strong>on</strong> who believes in a<br />
model should have their head examined.<br />
Thicker and faster<br />
But mostly the hurricane world has<br />
come round to the view that global warming,<br />
by ra<str<strong>on</strong>g>is</str<strong>on</strong>g>ing the sea-surface temperature,<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> causing the increase in hurricane activity.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g>re’s no denying that there’s an apparent<br />
oscillati<strong>on</strong> in the North Atlantic,<br />
says Tom Karl, director of the Nati<strong>on</strong>al Climatic<br />
Data Centre of America’s Nati<strong>on</strong>al<br />
Oceanic and Atmospheric Admin<str<strong>on</strong>g>is</str<strong>on</strong>g>trati<strong>on</strong>.<br />
But the increase in sea-surface temperatures<br />
has clearly had an important role<br />
and they’re not simply due to natural oscillati<strong>on</strong>s.<br />
It’s very clear that there <str<strong>on</strong>g>is</str<strong>on</strong>g> a human<br />
c<strong>on</strong>tributi<strong>on</strong> in play.<br />
Debate centres mostly <strong>on</strong> the questi<strong>on</strong><br />
of degree. Robert Muir-Wood, head of research<br />
at R<str<strong>on</strong>g>is</str<strong>on</strong>g>k Management Soluti<strong>on</strong>s, a<br />
rm that creates catastrophe models for<br />
use in the insurance industry, says that if<br />
you ask climatolog<str<strong>on</strong>g>is</str<strong>on</strong>g>ts how much of the<br />
extra activity <str<strong>on</strong>g>is</str<strong>on</strong>g> the result of climate<br />
change, the range of opini<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> between<br />
10% and 60%.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> insurance industry has a str<strong>on</strong>g interest<br />
in these matters. In 2004 and 2005,<br />
the two most active hurricane years <strong>on</strong> record,<br />
weather-related losses amounted to<br />
$145 billi<strong>on</strong> and $200 billi<strong>on</strong> respectively.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> big losses of the past two years have<br />
pushed reinsurance prices up. When<br />
events occur, prices r<str<strong>on</strong>g>is</str<strong>on</strong>g>e, says Chr<str<strong>on</strong>g>is</str<strong>on</strong>g>tian<br />
Mumenthaler, chief r<str<strong>on</strong>g>is</str<strong>on</strong>g>k ocer with Sw<str<strong>on</strong>g>is</str<strong>on</strong>g>s<br />
Re. Post-Katrina prices in th<str<strong>on</strong>g>is</str<strong>on</strong>g> bit of the reinsurance<br />
business have doubled. Such<br />
events usually pay themselves back.<br />
If prices are r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing, that should be a signal<br />
to people and businesses to avoid settling<br />
in r<str<strong>on</strong>g>is</str<strong>on</strong>g>ky areas. <str<strong>on</strong>g>The</str<strong>on</strong>g> ec<strong>on</strong>omic centre of<br />
the hurricane business <str<strong>on</strong>g>is</str<strong>on</strong>g> Florida, which <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
both the most vulnerable part of America<br />
and the most valuable. In 2004 the total<br />
value of insured coastal property in Florida<br />
was $1.937 trilli<strong>on</strong>, compared with<br />
$1.902 trilli<strong>on</strong> in New York. Unfortunately,<br />
the signal <str<strong>on</strong>g>is</str<strong>on</strong>g> not getting through to homeowners<br />
in Florida, because the government<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> cushi<strong>on</strong>ing the blow. Insurance<br />
companies in America may not set their<br />
own prices. <str<strong>on</strong>g>The</str<strong>on</strong>g> rates they charge customers<br />
(and indeed the models <strong>on</strong> the bas<str<strong>on</strong>g>is</str<strong>on</strong>g> of<br />
which they calculate their rates) are regulated<br />
by state governments. Commun<str<strong>on</strong>g>is</str<strong>on</strong>g>m<br />
survives in three parts of the world, says<br />
Mr Muir-Wood: North Korea, Cuba and<br />
the American insurance market.<br />
Not surpr<str<strong>on</strong>g>is</str<strong>on</strong>g>ingly, insuring property in<br />
Florida <str<strong>on</strong>g>is</str<strong>on</strong>g> not very protable. According to<br />
the Insurance Informati<strong>on</strong> Institute, the<br />
cumulative underwriting loss <strong>on</strong> Florida<br />
homeowners’ insurance in 1992-2004 was<br />
$8.6 billi<strong>on</strong>. As a result, insurers are going<br />
bust or pulling out. Ten collapsed after<br />
Hurricane Andrew in 1992; three companies<br />
owned by Poe Financial Group, Florida’s<br />
sec<strong>on</strong>d-biggest home insurers, went<br />
into liquidati<strong>on</strong> th<str<strong>on</strong>g>is</str<strong>on</strong>g> summer. Allstate decided<br />
last year not to renew 12.5% of its<br />
758,000 policies in Florida.<br />
But Floridians need not fear being left<br />
without insurance in a hurricane. <str<strong>on</strong>g>The</str<strong>on</strong>g> state<br />
provides cover, through the Citizens Property<br />
Insurance Corporati<strong>on</strong>. Some<br />
900,000 Floridians now get their home insurance<br />
from Citizens, which taps the taxpayer<br />
to cover its decits. In May, Jeb Bush,<br />
the state’s governor, signed a bill for a<br />
$715m subsidy to help the company cover<br />
last year’s $1.6 billi<strong>on</strong> hole. According to<br />
Robert Hartwig, chief ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t of the Insurance<br />
Informati<strong>on</strong> Institute, bailing out<br />
Citizens requires grandmothers living in<br />
trailer parks <strong>on</strong> xed incomes in [inland]<br />
Gainesville to subsid<str<strong>on</strong>g>is</str<strong>on</strong>g>e milli<strong>on</strong>-dollar<br />
homes in Marco Island.<br />
1<br />
Stormy weather<br />
North Atlantic:<br />
sea-surface<br />
temperature, °C<br />
27.8<br />
27.6<br />
27.4<br />
27.2<br />
27.0<br />
26.8<br />
1930 40 50 60 70 80 90 2000<br />
11-year running mean<br />
Source: NOAA<br />
2<br />
annual frequency<br />
of tropical storms<br />
16<br />
14<br />
12<br />
10<br />
8<br />
6
2<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006 A survey of climate change 7<br />
Thanks to subsid<str<strong>on</strong>g>is</str<strong>on</strong>g>ed insurance, the<br />
r<str<strong>on</strong>g>is</str<strong>on</strong>g>ks of living <strong>on</strong> Florida’s coast are not re-<br />
ected in property prices. In 2005the<br />
year after the most damaging hurricane<br />
year eversix of the nine metropolitan areas<br />
with the fastest-r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing house prices in<br />
America were in Florida. <str<strong>on</strong>g>The</str<strong>on</strong>g> state’s populati<strong>on</strong><br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> expected to r<str<strong>on</strong>g>is</str<strong>on</strong>g>e by 52% between<br />
2003 and 2030, as against 21% for the country<br />
as a whole. <str<strong>on</strong>g>The</str<strong>on</strong>g> insurance industry <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
not impressed. You’ve got to send a<br />
proper price signal, says David Unnewehr<br />
of the American Insurance Associati<strong>on</strong>.<br />
You can’t subsid<str<strong>on</strong>g>is</str<strong>on</strong>g>e development<br />
Where the wild things are<br />
Not where they used to be, as the world gets warmer<br />
EDITH’S CHECKERSPOT <str<strong>on</strong>g>is</str<strong>on</strong>g> an unremarkable<br />
brown, white and black spotted<br />
buttery whose main d<str<strong>on</strong>g>is</str<strong>on</strong>g>tingu<str<strong>on</strong>g>is</str<strong>on</strong>g>hing<br />
character<str<strong>on</strong>g>is</str<strong>on</strong>g>tic <str<strong>on</strong>g>is</str<strong>on</strong>g> that it <str<strong>on</strong>g>is</str<strong>on</strong>g> watched, with obsessive<br />
but benevolent attenti<strong>on</strong>, by Camille<br />
Parmesan, a biolog<str<strong>on</strong>g>is</str<strong>on</strong>g>t at the University<br />
of Texas. Ms Parmesan <str<strong>on</strong>g>is</str<strong>on</strong>g> troubled by<br />
what <str<strong>on</strong>g>is</str<strong>on</strong>g> happening to the buttery. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
populati<strong>on</strong>s at the southernmost end of its<br />
range, in California, have been dying out.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> vegetati<strong>on</strong> it lives <strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> getting dryer,<br />
which makes it hard for newborn caterpillars<br />
to survive.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> tiny, <strong>on</strong>e-to-two-day-old caterpillars<br />
were unable to walk the inch or more<br />
to nearby plants and thus starved to<br />
death, records Ms Parmesan in a paper <strong>on</strong><br />
the subject. (<str<strong>on</strong>g>The</str<strong>on</strong>g> source <str<strong>on</strong>g>is</str<strong>on</strong>g> aecti<strong>on</strong>ately<br />
cited as: Parmesan, pers<strong>on</strong>al observati<strong>on</strong>.)<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> species’ range has extended 55 miles<br />
(88km) northwards, but that <str<strong>on</strong>g>is</str<strong>on</strong>g> not much<br />
help to the three endangered subspecies<br />
the bay checkerspot, Taylor’s checkerspot<br />
and Quino checkerspotliving at the<br />
southern end of its range.<br />
Whereas people these days are mostly<br />
able to adapt their envir<strong>on</strong>ment to suit<br />
themselves, the world’s other inhabitants<br />
still have to adapt themselves to their envir<strong>on</strong>ment.<br />
When circumstances change,<br />
they adjust in two main ways: by changing<br />
the timing of important life events, such as<br />
hibernati<strong>on</strong>, migrati<strong>on</strong> and breeding; or,<br />
like Edith’s checkerspot, by moving to nd<br />
more comfortable living quarters.<br />
Ms Parmesan and Gary Yohe of Wesleyan<br />
University, C<strong>on</strong>necticut, who<br />
looked at data <strong>on</strong> how species were adapting,<br />
found that, of a total of 677, nearly<br />
through insurance.<br />
What would Florida look like if the<br />
price signals were getting through? More<br />
like Grand Bahama, probably, which <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
covered by the Brit<str<strong>on</strong>g>is</str<strong>on</strong>g>h insurance market.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> Queen’s Cove canal estate in north<br />
Grand Bahama, which has been ooded<br />
three times in six years, <str<strong>on</strong>g>is</str<strong>on</strong>g> no l<strong>on</strong>ger insurable.<br />
People are moving out and new<br />
houses are being built <strong>on</strong> stilts.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> fool<str<strong>on</strong>g>is</str<strong>on</strong>g>hness of pouring m<strong>on</strong>ey into<br />
vulnerable areas <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong>e <str<strong>on</strong>g>is</str<strong>on</strong>g>sue that unites<br />
those divided hurricane scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts. In July,<br />
a group including Mr Emanuel and Phil<br />
two-thirds had brought forward the important<br />
events in their calendar. <str<strong>on</strong>g>The</str<strong>on</strong>g> Mexican<br />
jay in the Chiricuahua Mountains in<br />
Ariz<strong>on</strong>a, for instance, <str<strong>on</strong>g>is</str<strong>on</strong>g> breeding ten days<br />
earlier than it was 30 years ago. Tree swallows’<br />
breeding seas<strong>on</strong> advanced by an average<br />
of nine days between 1959 and 1991.<br />
In the Rocky Mountains, the yellow-bellied<br />
marmot <str<strong>on</strong>g>is</str<strong>on</strong>g> emerging from hibernati<strong>on</strong><br />
23 days earlier than it did in the 1970s.<br />
Of the 434 species that had moved their<br />
range, four-fths had moved northwards<br />
or to higher ground. <str<strong>on</strong>g>The</str<strong>on</strong>g> red fox, for instance,<br />
has col<strong>on</strong><str<strong>on</strong>g>is</str<strong>on</strong>g>ed an extra 600 miles of<br />
Ban Island. That’s ne for the red fox,<br />
which, as the owner of any Brit<str<strong>on</strong>g>is</str<strong>on</strong>g>h dustbin<br />
knows, <str<strong>on</strong>g>is</str<strong>on</strong>g> in no danger of dying out, but<br />
less good for the Arctic fox at whose heels<br />
it <str<strong>on</strong>g>is</str<strong>on</strong>g> snapping.<br />
Still, there <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong>ly so far a species can<br />
move, as the polar bear has found to its<br />
cost. Thinning Arctic ice <str<strong>on</strong>g>is</str<strong>on</strong>g> making hunting<br />
more dicult for it, and there <str<strong>on</strong>g>is</str<strong>on</strong>g> nowhere<br />
colder to go. <str<strong>on</strong>g>The</str<strong>on</strong>g> <strong>on</strong>ly l<strong>on</strong>g-term study of a<br />
polar-bear populati<strong>on</strong>from Huds<strong>on</strong> Bay,<br />
in Manitoba in Canadasuggests that the<br />
animals are, <strong>on</strong> average, 15% thinner than<br />
they were 30 years ago. <str<strong>on</strong>g>The</str<strong>on</strong>g> populati<strong>on</strong><br />
has dropped by 17% in the past ten years.<br />
America’s F<str<strong>on</strong>g>is</str<strong>on</strong>g>h and Wildlife Service <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
thinking of putting the polar bear <strong>on</strong> the<br />
endangered-species l<str<strong>on</strong>g>is</str<strong>on</strong>g>t.<br />
Some species, of course, are doing very<br />
nicely out of climate change. Warming<br />
aside, plants are likely to our<str<strong>on</strong>g>is</str<strong>on</strong>g>h with<br />
more carb<strong>on</strong> dioxide around. Northern areas<br />
are likely to see an increasing diversity<br />
of species.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g>re <str<strong>on</strong>g>is</str<strong>on</strong>g>, however, a comm<strong>on</strong> diculty<br />
Klotzbach, Bill Gray’s sidekick, put out a<br />
joint statement. We are optim<str<strong>on</strong>g>is</str<strong>on</strong>g>tic, they<br />
said, that c<strong>on</strong>tinued research will eventually<br />
resolve much of the current c<strong>on</strong>troversy<br />
over the eect of climate change <strong>on</strong><br />
hurricanes. But the more urgent problem<br />
of our lemming-like march to the sea requires<br />
immediate and sustained attenti<strong>on</strong>.<br />
We call up<strong>on</strong> leaders of government and<br />
industry to undertake a comprehensive<br />
evaluati<strong>on</strong> of building practices and insurance,<br />
land-use and d<str<strong>on</strong>g>is</str<strong>on</strong>g>aster-relief policies<br />
that currently serve to promote an ever-increasing<br />
vulnerability to hurricanes. 7<br />
A chequered future<br />
for all animals and plants: they nd it harder<br />
to adapt these days because people get<br />
in the way. Cities, roads, farmland and all<br />
the other manifestati<strong>on</strong>s of human civil<str<strong>on</strong>g>is</str<strong>on</strong>g>ati<strong>on</strong><br />
leave less space for other species.<br />
That <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong>e reas<strong>on</strong> why some of them are<br />
in danger of dying out. Chr<str<strong>on</strong>g>is</str<strong>on</strong>g> Thomas, professor<br />
of c<strong>on</strong>servati<strong>on</strong> biology at Leeds<br />
University in Britain, and colleagues,<br />
reck<strong>on</strong> that, if the IPCC’s mid-range climate-change<br />
scenario (a 2-3°C increase by<br />
2100) <str<strong>on</strong>g>is</str<strong>on</strong>g> right, between 15% and 37% of the<br />
species whose prospects they modelled<br />
will be extinct by 2050. 7
8 A survey of climate change <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006<br />
D<str<strong>on</strong>g>is</str<strong>on</strong>g>mal calculati<strong>on</strong>s<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> ec<strong>on</strong>omics of living with climate changeor mitigating it<br />
SCIENTISTS are better at getting headlines<br />
than ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts are: doom for the<br />
planet makes better copy than cost-benet<br />
analyses. That may be why some ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts<br />
feel that the <str<strong>on</strong>g>is</str<strong>on</strong>g>sue has been captured<br />
by ec<strong>on</strong>omically illiterate climatolog<str<strong>on</strong>g>is</str<strong>on</strong>g>ts<br />
who do not seem to understand that mitigating<br />
climate change means spending<br />
real m<strong>on</strong>ey now in exchange for uncertain<br />
benets in a remote future. <str<strong>on</strong>g>The</str<strong>on</strong>g>y have<br />
been working hard to put gures <strong>on</strong> the<br />
costs and benets of climate change and of<br />
trying to mitigate it.<br />
That has not been easy. Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts<br />
struggle under a cascade of uncertainties<br />
how much carb<strong>on</strong> dioxide the world goes<br />
<strong>on</strong> emitting (which itself depends <strong>on</strong><br />
whether governments pay attenti<strong>on</strong> to the<br />
scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts’ warnings); how fast temperatures<br />
will increase in resp<strong>on</strong>se to greater<br />
c<strong>on</strong>centrati<strong>on</strong>s of carb<strong>on</strong> dioxide (which<br />
depends <strong>on</strong> feedback mechan<str<strong>on</strong>g>is</str<strong>on</strong>g>ms); what<br />
eect climate change will have <strong>on</strong> ec<strong>on</strong>omies<br />
(which depends <strong>on</strong> how good people<br />
are at adapting to it); and many more.<br />
Not all the change will be bad. An extra<br />
couple of degrees might not do northern<br />
Europe any harm. Russia could benet<br />
hugely from a bit of warming: large parts<br />
of the country that are currently uninhabitable<br />
could become comfortable enough<br />
to live in. <str<strong>on</strong>g>The</str<strong>on</strong>g> 25% of the world’s und<str<strong>on</strong>g>is</str<strong>on</strong>g>covered<br />
oil and gas reserves that are reck<strong>on</strong>ed<br />
to be in the Arctic, much of them in Russia,<br />
would become easier to get at. According<br />
to <strong>on</strong>e estimate of the costs and benets of<br />
climate change, by Robert Mendelsohn, a<br />
professor at Yale University, a 2.5°C increase<br />
in temperature would increase GDP<br />
in the former Soviet Uni<strong>on</strong> by 11% (compared<br />
with a 0.3% r<str<strong>on</strong>g>is</str<strong>on</strong>g>e in North America). A<br />
less optim<str<strong>on</strong>g>is</str<strong>on</strong>g>tic estimate by the father of climate-change<br />
ec<strong>on</strong>omics, William Nordhaus,<br />
publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed in 2000, predicts a reducti<strong>on</strong><br />
in American GDP of 0.5%.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> world as a whole looks likely to<br />
lose out. In Mr Mendelsohn’s model,<br />
global output falls very slightly, by 0.1% a<br />
year. In Mr Nordhaus’s model, it drops by<br />
2%. That <str<strong>on</strong>g>is</str<strong>on</strong>g> because Africa and India pull<br />
the average down: Mr Mendelsohn has Indian<br />
GDP falling by 2% and no gure for Africa;<br />
Mr Nordhaus has India dropping by<br />
5% and Africa by 4%. It <str<strong>on</strong>g>is</str<strong>on</strong>g> not just that Africa<br />
and India are already hot; being poor, they<br />
are also more dependent <strong>on</strong> agriculture<br />
than the rest of the world; and agriculture<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> more vulnerable to climate change than<br />
are investment banking or car assembly.<br />
Estimates of the eect of climate<br />
change <strong>on</strong> global output are r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing, partly<br />
thanks to new work <strong>on</strong> ec<strong>on</strong>omics and geography,<br />
in particular by Jerey Sachs, director<br />
of Columbia University’s Earth Institute,<br />
and Mr Nordhaus, who has come<br />
round to the view that temperature has a<br />
profound impact <strong>on</strong> ec<strong>on</strong>omic development.<br />
Putting more weight <strong>on</strong> temperature<br />
as a factor in growth ra<str<strong>on</strong>g>is</str<strong>on</strong>g>es estimates of the<br />
damage from climate change. In h<str<strong>on</strong>g>is</str<strong>on</strong>g> latest<br />
paper <strong>on</strong> the subject, Mr Nordhaus puts<br />
the damage to the global ec<strong>on</strong>omy of a<br />
2.5°C temperature r<str<strong>on</strong>g>is</str<strong>on</strong>g>e at 3% of global output,<br />
up from the 2% he estimated in 2000.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> other reas<strong>on</strong> that estimates are<br />
tending to r<str<strong>on</strong>g>is</str<strong>on</strong>g>e <str<strong>on</strong>g>is</str<strong>on</strong>g> the science. More papers<br />
suggesting that the glaciers are melting<br />
and the Gulf Stream <str<strong>on</strong>g>is</str<strong>on</strong>g> slowing mean that<br />
more ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts are building outlying<br />
possibilities of catastrophe into their calculati<strong>on</strong>s<br />
of potential damage.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> bill<br />
So how does the estimated cost of climate<br />
change compare with the cost of mitigating<br />
the eects? Unsurpr<str<strong>on</strong>g>is</str<strong>on</strong>g>ingly, that <str<strong>on</strong>g>is</str<strong>on</strong>g> not<br />
easy to calculate either. First, what <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
meant by mitigati<strong>on</strong>? Many experts would<br />
settle for stabil<str<strong>on</strong>g>is</str<strong>on</strong>g>ing the carb<strong>on</strong> c<strong>on</strong>tent of<br />
the atmosphere at around 550 parts per<br />
milli<strong>on</strong>. <str<strong>on</strong>g>The</str<strong>on</strong>g>re <str<strong>on</strong>g>is</str<strong>on</strong>g> no particular magic to<br />
that gure, but given that carb<strong>on</strong> c<strong>on</strong>centrati<strong>on</strong>s<br />
are now at 380ppm, it looks<br />
Forget cheap energy<br />
Illustrative costs of em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s-reducing technologies relative to a marker*<br />
achievable and does not make most scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts’<br />
hair stand <strong>on</strong> end.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> costs of mitigati<strong>on</strong> depend principally<br />
<strong>on</strong> three factors. First, how far energy<br />
demand can be reduced by relatively<br />
cheap energy-eciency measures. Plenty,<br />
according to the Internati<strong>on</strong>al Energy<br />
Agency: new buildings, for instance, can<br />
be made 70% more ecient than average<br />
ex<str<strong>on</strong>g>is</str<strong>on</strong>g>ting <strong>on</strong>es. <str<strong>on</strong>g>The</str<strong>on</strong>g> IEA reck<strong>on</strong>s that by<br />
2050, energy-ecient technologies can<br />
bring em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s back to 2000 levels at<br />
moderate cost.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> sec<strong>on</strong>d factor <str<strong>on</strong>g>is</str<strong>on</strong>g> how fast the price<br />
of renewable technologies will fall. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
gap between some of them and fossil-fuelbased<br />
energy should shrink (see table 3) as<br />
technologies mature and manufacturing<br />
volumes r<str<strong>on</strong>g>is</str<strong>on</strong>g>e. That’s already happened for<br />
some renewables. <str<strong>on</strong>g>The</str<strong>on</strong>g> cost of wind-power<br />
generati<strong>on</strong>, for instance, has come down<br />
from 8-10 cents to 3.5-4 cents per kWh since<br />
1990 because of better-designed turbines<br />
and higher volumes.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> third factor in the cost of mitigati<strong>on</strong><br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> how fast em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s are brought down.<br />
Worried scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts argue for doing th<str<strong>on</strong>g>is</str<strong>on</strong>g> as<br />
swiftly as possible. Cost-c<strong>on</strong>scious ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts<br />
plead for gradual<str<strong>on</strong>g>is</str<strong>on</strong>g>m. <str<strong>on</strong>g>The</str<strong>on</strong>g>y point out<br />
that, as CO2 hangs around in the air for up<br />
to 200 years, a t<strong>on</strong>ne produced now <str<strong>on</strong>g>is</str<strong>on</strong>g> not<br />
much worse than a t<strong>on</strong>ne produced in 20<br />
years’ time.<br />
Moreover, cutting em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s gradually<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> a great deal cheaper than doing it<br />
quickly, because machinery can be replaced<br />
with new, lower-em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s varieties<br />
at the end of its life-cycle instead of being<br />
written o prematurely. Richard 1<br />
Cost of<br />
Cost of substitute<br />
Technology Marker Cost/unit marker short-term ‡ l<strong>on</strong>g-term<br />
Nuclear Natural-gas combined-cycle power plant US cents/kWh 3.5-4 6 5<br />
Electricity from fossil<br />
fuels and carb<strong>on</strong><br />
capture and storage<br />
Natural-gas combined-cycle power plant US cents/kWh 3.5-4 5 6<br />
Wind Natural-gas combined-cycle power plant US cents/kWh 3.5-4 5 6<br />
Photovoltaic † Grid electricity US cents/kWh 10 15 8<br />
Biofuels Petrol $/gigajoule 12 15 15<br />
Source: Denn<str<strong>on</strong>g>is</str<strong>on</strong>g> Anders<strong>on</strong>, Imperial College, L<strong>on</strong>d<strong>on</strong><br />
*<str<strong>on</strong>g>The</str<strong>on</strong>g> technology that would be d<str<strong>on</strong>g>is</str<strong>on</strong>g>placed by the new technology<br />
† Solar input=2000 kWh/m 2 ‡ 10 years<br />
3
<str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006 A survey of climate change 9<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g>re’s nowhere else to live<br />
2 Richels of the Electric Power Research Institute<br />
reck<strong>on</strong>s that the cost of stabil<str<strong>on</strong>g>is</str<strong>on</strong>g>ing<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s at 550ppm would be a quarter<br />
of doing so at 450ppm, which would require<br />
ex<str<strong>on</strong>g>is</str<strong>on</strong>g>ting plant to be scrapped.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> range of estimates of the cost of<br />
mitigating climate change <str<strong>on</strong>g>is</str<strong>on</strong>g> not quite as<br />
large as that of estimates of the damage<br />
caused by climate change, but big enough<br />
to make it hard to decide between acti<strong>on</strong><br />
and inacti<strong>on</strong>. Britain’s House of Lords report<br />
<strong>on</strong> the ec<strong>on</strong>omics of climate change<br />
came up with a range of 0.2-3.2% of global<br />
output a year for the cost of mitigati<strong>on</strong>, but<br />
pointed out that unless developing countries<br />
start doing their bit, rich countries will<br />
end up spending more. Some c<strong>on</strong>sider the<br />
House of Lords gures too high: evidence<br />
to Sir Nicholas Stern, a former chief ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t<br />
at the World Bank and head of Britain’s<br />
Government Ec<strong>on</strong>omic Service, who<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> due shortly to report <strong>on</strong> the ec<strong>on</strong>omics<br />
of climate change, suggests costs in the<br />
range of 0.4%-1% of global GDP.<br />
Bey<strong>on</strong>d price<br />
But deciding whether it <str<strong>on</strong>g>is</str<strong>on</strong>g> worth taking acti<strong>on</strong><br />
against climate change <str<strong>on</strong>g>is</str<strong>on</strong>g> not as simple<br />
as setting the costs of climate change<br />
against the costs of mitigati<strong>on</strong>. <str<strong>on</strong>g>The</str<strong>on</strong>g>re are a<br />
couple of ethical questi<strong>on</strong>s that shift the argument<br />
towards mitigati<strong>on</strong>.<br />
One involves the diculty of doing<br />
cost-benet analys<str<strong>on</strong>g>is</str<strong>on</strong>g> across borders.<br />
M<strong>on</strong>ey <str<strong>on</strong>g>is</str<strong>on</strong>g> worth more in the poor world<br />
than it <str<strong>on</strong>g>is</str<strong>on</strong>g> in the rich world. <str<strong>on</strong>g>The</str<strong>on</strong>g> sharpest ex-<br />
ample of that <str<strong>on</strong>g>is</str<strong>on</strong>g> the implicit price of life:<br />
the amount of m<strong>on</strong>ey spent <strong>on</strong> health care<br />
in Britain and India implies that the life of<br />
a Brit<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> worth more than the life of an<br />
Indian. Politically, however, that <str<strong>on</strong>g>is</str<strong>on</strong>g> hard to<br />
sustain; indeed, the rst meeting of the<br />
IPCC nearly fell apart <strong>on</strong> th<str<strong>on</strong>g>is</str<strong>on</strong>g> questi<strong>on</strong>.<br />
Many ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts therefore go for some<br />
equity weightingputting a greater<br />
value <strong>on</strong> a dollar of damage in India than<br />
in Britain. And, because climate change <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
likely to do more damage to India than to<br />
America, the higher the equity weighting,<br />
the higher the social cost of carb<strong>on</strong>.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> other questi<strong>on</strong> c<strong>on</strong>cerns doing<br />
cost-benet analys<str<strong>on</strong>g>is</str<strong>on</strong>g> across many generati<strong>on</strong>s.<br />
In standard cost-benet analys<str<strong>on</strong>g>is</str<strong>on</strong>g>,<br />
each pound or dollar spent th<str<strong>on</strong>g>is</str<strong>on</strong>g> year <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
reck<strong>on</strong>ed to be worth slightly more than<br />
<strong>on</strong>e spent next year, partly because ec<strong>on</strong>omic<br />
growth will usually make people<br />
richer next year than th<str<strong>on</strong>g>is</str<strong>on</strong>g>. Th<str<strong>on</strong>g>is</str<strong>on</strong>g> preference<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> expressed in a d<str<strong>on</strong>g>is</str<strong>on</strong>g>count rate which, depending<br />
<strong>on</strong> interest rates, <str<strong>on</strong>g>is</str<strong>on</strong>g> usually set at<br />
somewhere between 3% and 6%. So with a<br />
d<str<strong>on</strong>g>is</str<strong>on</strong>g>count rate set at a normal level, the<br />
benets bey<strong>on</strong>d half a century barely<br />
count. Th<str<strong>on</strong>g>is</str<strong>on</strong>g> usually does not matter much,<br />
because most of the investments in questi<strong>on</strong><br />
have a time horiz<strong>on</strong> of 20-50 years.<br />
But climate change <str<strong>on</strong>g>is</str<strong>on</strong>g> not expected to do<br />
much damage within the next 50 years, so<br />
at a normal d<str<strong>on</strong>g>is</str<strong>on</strong>g>count rate mitigating climate<br />
change does not seem worthwhile.<br />
Some ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts try doing their sums<br />
instead with a d<str<strong>on</strong>g>is</str<strong>on</strong>g>count rate which holds<br />
future benets equal in value to current<br />
<strong>on</strong>es. That gives a much higher social cost<br />
of carb<strong>on</strong> than a normal d<str<strong>on</strong>g>is</str<strong>on</strong>g>count rate, so<br />
mitigating climate change becomes corresp<strong>on</strong>dingly<br />
more attractive. Th<str<strong>on</strong>g>is</str<strong>on</strong>g> <str<strong>on</strong>g>is</str<strong>on</strong>g> justi-<br />
ed partly through ec<strong>on</strong>omicsthat the<br />
c<strong>on</strong>sequences of not taking acti<strong>on</strong> may be<br />
so catastrophic that normal ec<strong>on</strong>omic<br />
growth cannot be assumedand partly<br />
through ethicsthat the interests of future<br />
generati<strong>on</strong>s are worth as much as those of<br />
the current <strong>on</strong>e.<br />
Critics such as Bjorn Lomborg, author<br />
of <str<strong>on</strong>g>The</str<strong>on</strong>g> Skeptical Envir<strong>on</strong>mental<str<strong>on</strong>g>is</str<strong>on</strong>g>t, questi<strong>on</strong><br />
the grounds for giving th<str<strong>on</strong>g>is</str<strong>on</strong>g> problem<br />
such special treatment. Given the uncertain<br />
returns from taking acti<strong>on</strong> against climate<br />
change, they argue, the m<strong>on</strong>ey<br />
would be better spent <strong>on</strong> investments that<br />
have clear benets. If climate change <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
likely to do most damage in poor countries,<br />
why not instead spend the m<strong>on</strong>ey<br />
<strong>on</strong>, say, educati<strong>on</strong> there? Not <strong>on</strong>ly would<br />
that benet poor people now, it would<br />
also equip them better to deal with the<br />
r<str<strong>on</strong>g>is</str<strong>on</strong>g>ks that climate change brings.<br />
After all, the reas<strong>on</strong> why Bangladesh <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
so vulnerable to a 1-metre r<str<strong>on</strong>g>is</str<strong>on</strong>g>e in the sea<br />
level <str<strong>on</strong>g>is</str<strong>on</strong>g> not just its atness; it <str<strong>on</strong>g>is</str<strong>on</strong>g> also its poverty,<br />
as a result of which too many of its<br />
people live <strong>on</strong> subs<str<strong>on</strong>g>is</str<strong>on</strong>g>tence agriculture<br />
around the Bay of Bengal. If Bangladesh<br />
were South Korea, more people would be<br />
working in oces and factories and living<br />
in cities. <str<strong>on</strong>g>The</str<strong>on</strong>g> best protecti<strong>on</strong> for Bangladesh,<br />
in other words, <str<strong>on</strong>g>is</str<strong>on</strong>g> development. And<br />
anything (including climate-change mitigati<strong>on</strong>)<br />
that reduces the global rate of ec<strong>on</strong>omic<br />
growth <str<strong>on</strong>g>is</str<strong>on</strong>g> likely to slow development<br />
in Bangladesh, thus making the place<br />
more vulnerable to climate change than it<br />
otherw<str<strong>on</strong>g>is</str<strong>on</strong>g>e would be.<br />
That may well be true. But the c<strong>on</strong>sequences<br />
of climate change could amount<br />
to more than a 1-metre r<str<strong>on</strong>g>is</str<strong>on</strong>g>e in the sea level.<br />
It <str<strong>on</strong>g>is</str<strong>on</strong>g> quite possible that the Gulf Stream will<br />
switch itself o, that the ice sheets in<br />
Greenland and West Antarctica will start<br />
losing mass quickly, and that the release of<br />
methane from tundra will send temperatures<br />
spiralling upwards. If those d<str<strong>on</strong>g>is</str<strong>on</strong>g>astrous<br />
outlying possibilities are included in<br />
the calculati<strong>on</strong>s and the potential damages<br />
are averaged over the moderate to the<br />
catastrophic, the protective eects of a developed<br />
ec<strong>on</strong>omy fall and the benets of<br />
acti<strong>on</strong>to both the rich and the poor<br />
worldr<str<strong>on</strong>g>is</str<strong>on</strong>g>e.<br />
It <str<strong>on</strong>g>is</str<strong>on</strong>g> those outlying possibilities that<br />
have persuaded some ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts that it <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
worth trying to mitigate climate change.<br />
As Camer<strong>on</strong> Hepburn of Oxford Univer-1
10 A survey of climate change <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006<br />
2 sity says, I’m not especially worried<br />
about the mean. It’s the tail. If governments<br />
should ever be r<str<strong>on</strong>g>is</str<strong>on</strong>g>k-averse, it’s in the<br />
face of th<str<strong>on</strong>g>is</str<strong>on</strong>g> sort of d<str<strong>on</strong>g>is</str<strong>on</strong>g>tributi<strong>on</strong>. You can<br />
think about the r<str<strong>on</strong>g>is</str<strong>on</strong>g>ks as similar to those<br />
from terror<str<strong>on</strong>g>is</str<strong>on</strong>g>m.<br />
Sir Nicholas Stern seems to agree. In a<br />
paper publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed in World Ec<strong>on</strong>omics in<br />
June, he writes:<br />
Policymakers need to take into account the<br />
r<str<strong>on</strong>g>is</str<strong>on</strong>g>ks of greater dangers as well as central<br />
Selling hot air<br />
THE huge hall at the Koelnmesse, Cologne’s<br />
massive c<strong>on</strong>ference centre,<br />
looks like any other trade fair: rows of sellers’<br />
booths, some with buyers milling<br />
around them, some deserted. <str<strong>on</strong>g>The</str<strong>on</strong>g> participants’<br />
costume <str<strong>on</strong>g>is</str<strong>on</strong>g> a little unusualnot just<br />
the standard suits, but also chinos and Tshirts<br />
with green slogans. But what <str<strong>on</strong>g>is</str<strong>on</strong>g> being<br />
sold <str<strong>on</strong>g>is</str<strong>on</strong>g> very dierent: industrial gases<br />
to be captured from Chinese factories,<br />
trees to be planted in Africa, methane to be<br />
extracted from pig-euent in Brazil. Th<str<strong>on</strong>g>is</str<strong>on</strong>g> <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
the carb<strong>on</strong> market, the main achievement<br />
of the Kyoto protocol.<br />
Kyoto was a hard-fought attempt to do<br />
something immensely dicult: create a<br />
global mechan<str<strong>on</strong>g>is</str<strong>on</strong>g>m for solving a l<strong>on</strong>g-term<br />
problem. Not surpr<str<strong>on</strong>g>is</str<strong>on</strong>g>ingly, its achievements<br />
have been limited. America and<br />
Australia did not ratify the treaty. Canada<br />
looks as though it may fail to comply. It<br />
signed up for a 6% reducti<strong>on</strong> below 1990<br />
levels by 2012, but the latest gures suggest<br />
that it <str<strong>on</strong>g>is</str<strong>on</strong>g> now running around 23% above<br />
expectati<strong>on</strong>s, because the c<strong>on</strong>sequences if<br />
these r<str<strong>on</strong>g>is</str<strong>on</strong>g>ks were to material<str<strong>on</strong>g>is</str<strong>on</strong>g>e would be<br />
very serious. For example, extreme, abrupt<br />
and dangerous climate-change scenarios<br />
based <strong>on</strong> loss of carb<strong>on</strong> sinks and melting<br />
permafrost may not accord with the climate<br />
scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts’ central expectati<strong>on</strong>s, but their possibility<br />
must be recogn<str<strong>on</strong>g>is</str<strong>on</strong>g>ed when c<strong>on</strong>sidering<br />
the appropriate vigour of policy<br />
resp<strong>on</strong>ses. <str<strong>on</strong>g>The</str<strong>on</strong>g> prudential approach <str<strong>on</strong>g>is</str<strong>on</strong>g> comm<strong>on</strong><br />
in other areas of policy, from defence to<br />
nancial stability, and warrants more public<br />
acti<strong>on</strong> to mitigate climate change, not less.<br />
1990 levels. According to the new envir<strong>on</strong>ment<br />
min<str<strong>on</strong>g>is</str<strong>on</strong>g>ter, R<strong>on</strong>a Ambrose, it <str<strong>on</strong>g>is</str<strong>on</strong>g> impossible,<br />
impossible, for Canada to reach its<br />
Kyoto targets.<br />
Japan <str<strong>on</strong>g>is</str<strong>on</strong>g> supposed to be cutting its em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
to 6% below 1990 levels. It has no<br />
mandatory scheme, but many companies<br />
are participating in a voluntary <strong>on</strong>e. Still,<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s are currently running at 24%<br />
above 1990 levels, so it will probably have<br />
to buy credits from other countries.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> EU has taken Kyoto most seriously.<br />
In 2005 it launched the European Em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s-Trading<br />
Scheme (ETS), which <str<strong>on</strong>g>is</str<strong>on</strong>g> supposed<br />
to cut em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s from the EU’s ve<br />
dirtiest industries. Most big European<br />
countries have additi<strong>on</strong>al schemes to penal<str<strong>on</strong>g>is</str<strong>on</strong>g>e<br />
big CO 2 emitters and to boost renewables,<br />
which <str<strong>on</strong>g>is</str<strong>on</strong>g> why wind farms are<br />
sprouting all over Europe. Some big European<br />
countries, such as Germany, France<br />
and Britain, are either near to meeting their<br />
targets or have already d<strong>on</strong>e so by cutting<br />
domestic em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s. Others, such as Spain<br />
Out of the fog of uncertainty over the ec<strong>on</strong>omics<br />
of climate change, the outline of a<br />
few c<strong>on</strong>clusi<strong>on</strong>s emerges. Global warming<br />
poses a serious r<str<strong>on</strong>g>is</str<strong>on</strong>g>k, and the costs of mitigati<strong>on</strong><br />
are not so large as to be politically<br />
unthinkable. Mitigati<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> better d<strong>on</strong>e<br />
gradually than swiftly, because the faster it<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> d<strong>on</strong>e, the more it will cost. That said, the<br />
ec<strong>on</strong>omics of the subject are too uncertain<br />
for policymakers to lean heavily up<strong>on</strong><br />
them, so in the end it will be the politicians<br />
who decide. 7<br />
Kyoto’s main achievement was to create a market in carb<strong>on</strong>. It’s awed, but better than nothing<br />
A tour of the greenhouse<br />
Greenhouse-gas em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s, bn t<strong>on</strong>nes of carb<strong>on</strong> equivalent<br />
2000 2025 (projected)<br />
0 0.5 1.0 1.5 2.0 2.5 3.0<br />
World greenhouse-gas em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s by sector, 2000, % US energy sources, %<br />
Transport<br />
13.5<br />
Electricity<br />
& <str<strong>on</strong>g>heat</str<strong>on</strong>g><br />
24.5<br />
and Italy, are further behind.<br />
America was heavily involved in the<br />
design of the Kyoto protocol, and ins<str<strong>on</strong>g>is</str<strong>on</strong>g>ted<br />
that it should include the possibility of a<br />
market in em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s credits, <strong>on</strong> the ground<br />
that its trading scheme to reduce sulphurdioxide<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s had been a big success.<br />
Europe reluctantly agreed and, <strong>on</strong>ce America<br />
walked away from Kyoto, turned out to<br />
be the mainstay of the carb<strong>on</strong> market that<br />
the protocol has created.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> carb<strong>on</strong> market works like any other<br />
commodity market: companies trade and<br />
the market sets prices. But it <str<strong>on</strong>g>is</str<strong>on</strong>g> unusual in<br />
that the commodity being bought and<br />
sold does not ex<str<strong>on</strong>g>is</str<strong>on</strong>g>t: it <str<strong>on</strong>g>is</str<strong>on</strong>g> the certied absence<br />
of carb<strong>on</strong> em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s. <str<strong>on</strong>g>The</str<strong>on</strong>g> market <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
big, and growing fast. In the rst half of<br />
2006, carb<strong>on</strong> to the value of 12 billi<strong>on</strong><br />
($15 billi<strong>on</strong>) was traded, ve times more<br />
than in the same period in 2005.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g>re are two parts to the carb<strong>on</strong> market.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> rst, and largest in terms of cash, <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
the trade in allowances handed out to1<br />
Wood*<br />
Coal<br />
Oil<br />
Gas<br />
Hydro-electric<br />
Nuclear<br />
Renewables<br />
Sources: EIA; World Resources Institute *Biomass from 1950 <strong>on</strong>wards † China<br />
United<br />
States<br />
EU-15<br />
Waste<br />
3.6<br />
Agriculture<br />
13.5<br />
80<br />
60<br />
Former<br />
Soviet Uni<strong>on</strong><br />
India<br />
Other<br />
12.9<br />
40<br />
20<br />
Brazil<br />
Deforestati<strong>on</strong><br />
18.2<br />
Industry<br />
13.8 1850 70 90 1910 30 50 70 90<br />
0<br />
2005<br />
Preliminary<br />
†<br />
100<br />
?4
<str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006 A survey of climate change 11<br />
Anti-hero<br />
THE few remaining cycl<str<strong>on</strong>g>is</str<strong>on</strong>g>ts in Beijing<br />
r<str<strong>on</strong>g>is</str<strong>on</strong>g>k death <strong>on</strong>e way or another. If the<br />
city’s 4m cars, jammed <strong>on</strong>to the multiplying<br />
ringroads and yovers, do not get<br />
them, the polluted air will. It <str<strong>on</strong>g>is</str<strong>on</strong>g> so thick<br />
that you cannot see the sun, even <strong>on</strong> a<br />
sunny day.<br />
At present, rich countries emit more<br />
CO2 than developing countries do. But<br />
developing countries as a whole will<br />
overtake rich countries shortly; and<br />
China, the most populous of the emerging<br />
ec<strong>on</strong>omies, will become the world’s<br />
biggest greenhouse-gas emitter in 2015.<br />
Every year China builds 60 gigawatts<br />
of power-generati<strong>on</strong> capacity, almost as<br />
much as Britain’s entire ex<str<strong>on</strong>g>is</str<strong>on</strong>g>ting capacity.<br />
Four-fths of Chinese power <str<strong>on</strong>g>is</str<strong>on</strong>g> generated<br />
by coal, the dirtiest source of electricity.<br />
China currently uses 40% of the world’s<br />
coalmore than America, Europe and Japan<br />
put together.<br />
Polluti<strong>on</strong> has not been a priority for<br />
the Chinese government. All departments<br />
and min<str<strong>on</strong>g>is</str<strong>on</strong>g>tries are oriented towards<br />
GDP. Some comprehensive<br />
ec<strong>on</strong>omic departments should be in<br />
charge of planning, but all they want to<br />
do <str<strong>on</strong>g>is</str<strong>on</strong>g> author<str<strong>on</strong>g>is</str<strong>on</strong>g>e projects. Local leaders are<br />
the same. So the Envir<strong>on</strong>mental Protecti<strong>on</strong><br />
Agency <str<strong>on</strong>g>is</str<strong>on</strong>g> pretty weak, according to<br />
Pan Yue, vice-min<str<strong>on</strong>g>is</str<strong>on</strong>g>ter of the State Envir<strong>on</strong>mental<br />
Protecti<strong>on</strong> Agency.<br />
2 companies in the EU’s ve dirtiest industries<br />
under the ETS. Those companies have<br />
also been given em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s-reducti<strong>on</strong> targets,<br />
which they can meet by cutting their<br />
own em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s, or by buying allowances<br />
from other companies, or by purchasing<br />
credits from developing countries. That <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
the sec<strong>on</strong>d bit of the carb<strong>on</strong> market. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
trade in allowances does not actually reduce<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s. <str<strong>on</strong>g>The</str<strong>on</strong>g> trade in developingcountry<br />
credits does.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> Carb<strong>on</strong> Fair in Cologne, organ<str<strong>on</strong>g>is</str<strong>on</strong>g>ed<br />
by the World Bank, <str<strong>on</strong>g>is</str<strong>on</strong>g> the annual get-together<br />
of the sec<strong>on</strong>d bit of the market. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
buyers are from the participants in Europe’s<br />
ETS and Japan’s voluntary-reducti<strong>on</strong><br />
scheme. <str<strong>on</strong>g>The</str<strong>on</strong>g> sellers are developing<br />
countries. <str<strong>on</strong>g>The</str<strong>on</strong>g> rich countries that ratied<br />
Kyoto are expected to produce 3.5 billi<strong>on</strong><br />
But the government <str<strong>on</strong>g>is</str<strong>on</strong>g> becoming<br />
increasingly c<strong>on</strong>cerned about the problems<br />
that polluti<strong>on</strong> brings, such as sickness<br />
from lthy air and arid soil from acid<br />
rain, which has made it keen to boost the<br />
use of renewables and increase energy ef-<br />
ciency. It <str<strong>on</strong>g>is</str<strong>on</strong>g> building huge wind farms <strong>on</strong><br />
its coastline and even runs some hydrogen-fuelled<br />
buses in Beijing. Last year it<br />
pushed up fuel-eciency standards for<br />
cars sold in China, and by 2008 it will<br />
ra<str<strong>on</strong>g>is</str<strong>on</strong>g>e them above federal American levels.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> 11th ve-year plan, publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed earlier<br />
th<str<strong>on</strong>g>is</str<strong>on</strong>g> year, requires the ec<strong>on</strong>omy to become<br />
20% more energy-ecient by 2010.<br />
Between 1980 and 2000 China’s GDP<br />
quadrupled, whereas energy c<strong>on</strong>sumpti<strong>on</strong><br />
<strong>on</strong>ly doubled. <str<strong>on</strong>g>The</str<strong>on</strong>g> Chinese government<br />
intends to repeat that trick. But<br />
decentral<str<strong>on</strong>g>is</str<strong>on</strong>g>ati<strong>on</strong>, deregulati<strong>on</strong> and a huge<br />
infrastructure boom have boosted demand<br />
for power, and China’s ec<strong>on</strong>omy <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
now becoming more, not less, energy-intensive.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> energy elasticity of GDP (the<br />
relati<strong>on</strong>ship between changes in energy<br />
c<strong>on</strong>sumpti<strong>on</strong> and changes in GDP) rose<br />
from 0.5 in 2000 to 1.5 in 2004. <str<strong>on</strong>g>The</str<strong>on</strong>g> government<br />
has lost c<strong>on</strong>trol of industry,<br />
says Jiang Lin of America’s Lawrence<br />
Berkeley Nati<strong>on</strong>al Laboratory.<br />
Moreover, the goals of reducing polluti<strong>on</strong><br />
and mitigating the eects of climate<br />
change sometimes c<strong>on</strong>ict. <str<strong>on</strong>g>The</str<strong>on</strong>g> harmful<br />
t<strong>on</strong>nes of carb<strong>on</strong> above their targets by<br />
2012, so the prospects for sellers look good.<br />
Some of the sellers at the Koelnmesse<br />
are more popular and better organ<str<strong>on</strong>g>is</str<strong>on</strong>g>ed<br />
than others. <str<strong>on</strong>g>The</str<strong>on</strong>g> Chinese state planning<br />
committee stall has a glossy 200-page<br />
book crammed with projects, and a crowd<br />
of potential buyers. <str<strong>on</strong>g>The</str<strong>on</strong>g> man <strong>on</strong> the Senegalese<br />
stall has a photocopied piece of paper<br />
with six projects, and no customers.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> middlemen are niche investment<br />
banks, such as Climate Change Capital<br />
and Natsource, and project-management<br />
companies, such as Camco and AgCert.<br />
Camco, which oated earlier th<str<strong>on</strong>g>is</str<strong>on</strong>g> year,<br />
works mainly in China. It identies factories<br />
that emit lots of greenhouse gases<br />
and works out how to cut em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s; Ag-<br />
Cert builds sealed pools to c<strong>on</strong>tain the pig-<br />
Within a decade, China will emit<br />
more greenhouse gases than any<br />
other country<br />
Murky business<br />
pollutants released into the air by coal-<br />
red electricity generati<strong>on</strong>, such as sulphur,<br />
also dampen the greenhouse eect.<br />
Take them out and your people’s health<br />
will improve, but the world will get<br />
warmer, as the West found in the sec<strong>on</strong>d<br />
half of the 20th century. China, too,<br />
seems likely to choose cleaner air.<br />
euent in Brazil and Mexico, captures the<br />
methane it produces and burns it to produce<br />
electricity.<br />
Projects have to be certied by the UN.<br />
Most involve cutting em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s not of CO2 but of more potent greenhouse gases. HFC,<br />
for example, an industrial gas, has 11,000<br />
times the greenhouse eect of CO2. Some<br />
58% of the credits sold between January<br />
2005 and March 2006 were for HFC projects.<br />
Capturing it costs littleunder $1 per<br />
t<strong>on</strong>ne of CO2-equivalentand selling it <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
lucrative. Thanks to the insatiable demand<br />
for credits, developing-country sellers<br />
have been getting up to $24 a t<strong>on</strong>ne. Two<br />
Chinese deals al<strong>on</strong>e, set up by the World<br />
Bank, which has put together a c<strong>on</strong>sortium<br />
of buyers, are worth $930m. At current<br />
prices, China <str<strong>on</strong>g>is</str<strong>on</strong>g> reck<strong>on</strong>ed to have 1
12 A survey of climate change <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006<br />
2 about $6 billi<strong>on</strong>-7 billi<strong>on</strong>-worth of HFCs<br />
that could be captured.<br />
Not surpr<str<strong>on</strong>g>is</str<strong>on</strong>g>ingly, given both Chinese<br />
eciency and the amount of dirty industry<br />
in the country, two-thirds of the deals<br />
signed between January 2005 and March<br />
2006, by value, were with China. Keen to<br />
keep hold of the cash for its own purposes,<br />
the Chinese government has slapped a<br />
65% tax <strong>on</strong> HFC projects and <str<strong>on</strong>g>is</str<strong>on</strong>g> funnelling<br />
the m<strong>on</strong>ey into a sustainable development<br />
fund. Sustainable development!<br />
snorts a Chinese ocial. It’ll be spent <strong>on</strong><br />
infrastructure.<br />
All right for some<br />
Observers have three c<strong>on</strong>cerns about the<br />
carb<strong>on</strong> market. <str<strong>on</strong>g>The</str<strong>on</strong>g> rst <str<strong>on</strong>g>is</str<strong>on</strong>g> about prots<br />
and prices. Giving the ETS allowances<br />
away (rather than aucti<strong>on</strong>ing them) made<br />
the scheme easy for the power-generators<br />
and other polluters to swallow. But it also,<br />
in eect, handed them wads of cash: they<br />
simply passed the extra costs <strong>on</strong> to c<strong>on</strong>sumers<br />
and pocketed the m<strong>on</strong>ey. Accord-<br />
A coat of green<br />
CARBON DIOXIDE <str<strong>on</strong>g>is</str<strong>on</strong>g> a waste product<br />
from turning heavy oil into hydrogen.<br />
Pumped into greenhouses to boost plant<br />
growth, it <str<strong>on</strong>g>is</str<strong>on</strong>g> also an input into the marketgardening<br />
business, where it can increase<br />
productivity by a quarter.<br />
In the Botlek area of the Netherlands, a<br />
Shell renery used to release around 1m<br />
t<strong>on</strong>nes of CO2 a year into the air. Meanwhile<br />
the greenhouses in the area were<br />
making their own CO2. In the winter it was<br />
a by-product of their <str<strong>on</strong>g>heat</str<strong>on</strong>g>ing systems, but<br />
in the summer they had to burn gas to<br />
make CO2 and release waste <str<strong>on</strong>g>heat</str<strong>on</strong>g>.<br />
Shell real<str<strong>on</strong>g>is</str<strong>on</strong>g>ed that its supply of CO2 and<br />
the market gardeners’ demand for the stu<br />
could be put together to both businesses’<br />
advantage. So, since last year, it has been<br />
pumping some of its CO2 directly into 500<br />
greenhouses full of roses, tomatoes and<br />
cucumbers. As a result, its CO2 em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
into the air are 170,000 t<strong>on</strong>nes a year<br />
down, and the greenhouses are using 95m<br />
fewer cubic metres of gas.<br />
Business seems to be buzzing with<br />
green activity. Newspapers are full of advert<str<strong>on</strong>g>is</str<strong>on</strong>g>ements<br />
from companies parading<br />
their envir<strong>on</strong>mental credentials. Some of<br />
ing to a report by IPA Energy C<strong>on</strong>sulting,<br />
Britain’s power-generati<strong>on</strong> sector al<strong>on</strong>e<br />
made a prot of around £800m ($1.5 billi<strong>on</strong>)<br />
from the scheme in its rst year.<br />
Meanwhile, power prices went up<br />
steeply. According to a paper by Jos Sijm of<br />
the Energy Research Centre in the Netherlands,<br />
when allowances were 20 a t<strong>on</strong>ne,<br />
European generators passed <strong>on</strong> between<br />
1 and 19 per MWh to customers, depending<br />
<strong>on</strong> the structure of the market and<br />
the sources of electricity. In France, where<br />
the price <str<strong>on</strong>g>is</str<strong>on</strong>g> determined largely by carb<strong>on</strong>free<br />
nuclear generati<strong>on</strong>, they passed <strong>on</strong><br />
least. In Germany, where it <str<strong>on</strong>g>is</str<strong>on</strong>g> largely determined<br />
by coal, they passed <strong>on</strong> most. Partly<br />
as a result, German o-peak electricity<br />
prices doubled in the two years to January<br />
2006, to just over 40 per MWh, setting<br />
c<strong>on</strong>sumers squawking.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> sec<strong>on</strong>d worry <str<strong>on</strong>g>is</str<strong>on</strong>g> about the purchase<br />
of credits from developing countries.<br />
Partly thanks to the Chinese government’s<br />
65% tax <strong>on</strong> em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s-reducti<strong>on</strong><br />
credits, European companies are paying<br />
th<str<strong>on</strong>g>is</str<strong>on</strong>g> <str<strong>on</strong>g>is</str<strong>on</strong>g> driven by c<strong>on</strong>sumers. Greenness<br />
has become a moral <str<strong>on</strong>g>is</str<strong>on</strong>g>sue, and companies<br />
such as Wal-Mart, which are seen by some<br />
as oppressing their workers and destroying<br />
communities, can improve their image<br />
by looking good envir<strong>on</strong>mentally.<br />
Some of it <str<strong>on</strong>g>is</str<strong>on</strong>g> driven by recruitment. Oil<br />
companies need talented graduates, many<br />
of whom want to make the world a better<br />
place. Chr<str<strong>on</strong>g>is</str<strong>on</strong>g> Mottershead, BP’s adv<str<strong>on</strong>g>is</str<strong>on</strong>g>er <strong>on</strong><br />
energy and the envir<strong>on</strong>ment, says the<br />
company <str<strong>on</strong>g>is</str<strong>on</strong>g> happy with the green splash it<br />
has made: We are attracting the best graduates<br />
again. When they come for an interview,<br />
they nd that people are talking<br />
about things that res<strong>on</strong>ate with them.<br />
Some of it <str<strong>on</strong>g>is</str<strong>on</strong>g> about saving m<strong>on</strong>ey. In<br />
most companies energy c<strong>on</strong>sumpti<strong>on</strong> has<br />
not, until recently, been much of an <str<strong>on</strong>g>is</str<strong>on</strong>g>sue.<br />
Nobody ever became vice-president by<br />
cutting the electricity bill, says Alex Farrell,<br />
of the Energy and Resources Group at<br />
the University of California at Berkeley.<br />
But r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing electricity prices have focused<br />
attenti<strong>on</strong> <strong>on</strong> energy, and companies that<br />
cut their electricity bills also cut their em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s,<br />
and can boast about that.<br />
Most of the wave of greenery, how-<br />
many times the actual cost of reducing<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s. That price they pay <str<strong>on</strong>g>is</str<strong>on</strong>g> passed <strong>on</strong><br />
to European c<strong>on</strong>sumers, who may eventually<br />
revolt when they real<str<strong>on</strong>g>is</str<strong>on</strong>g>e how much<br />
m<strong>on</strong>ey they are pouring into Chinese government<br />
coers.<br />
Third, the time-horiz<strong>on</strong>s for Kyoto (up<br />
to 2012) and, even more, for the ETS<br />
(whose rst period runs <strong>on</strong>ly up to 2008)<br />
are too short. So whereas projects in the<br />
near term (such as capturing nasty Chinese<br />
gases) are nancially worthwhile,<br />
l<strong>on</strong>ger-term <strong>on</strong>es that may be just as desirable<br />
(such as investing in cleaner powergenerating<br />
plant) are not.<br />
All that said, th<str<strong>on</strong>g>is</str<strong>on</strong>g> <str<strong>on</strong>g>is</str<strong>on</strong>g> the rst attempt to<br />
deal rati<strong>on</strong>ally with a hugely complex problem,<br />
so it would be odd if it did not encounter<br />
diculties. And it has made some<br />
headway: last year it got rich-world c<strong>on</strong>sumers<br />
to invest $2.7 billi<strong>on</strong> to cut developing-country<br />
greenhouse-gas em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s by<br />
around 374m t<strong>on</strong>nes of CO 2 equivalent.<br />
That <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong>ly about half of Texas’s annual<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>sbut it’s a start. 7<br />
Business <str<strong>on</strong>g>is</str<strong>on</strong>g> becoming more envir<strong>on</strong>ment-minded, but <strong>on</strong>ly because government <str<strong>on</strong>g>is</str<strong>on</strong>g> pushing<br />
ever, <str<strong>on</strong>g>is</str<strong>on</strong>g> driven by government. Companies<br />
are investing in climate-friendly products<br />
and processes because governments have<br />
changed the rules to make it worthwhile<br />
doing so, and because companies believe<br />
that there will be more of the same in the<br />
future. That <str<strong>on</strong>g>is</str<strong>on</strong>g> the main reas<strong>on</strong> for the advert<str<strong>on</strong>g>is</str<strong>on</strong>g>ing,<br />
the public relati<strong>on</strong>s and the quieter<br />
but energetic lobbying.<br />
If there <str<strong>on</strong>g>is</str<strong>on</strong>g> going to be regulati<strong>on</strong>, companies<br />
want to help shape it. We started<br />
looking at th<str<strong>on</strong>g>is</str<strong>on</strong>g> <str<strong>on</strong>g>is</str<strong>on</strong>g>sue a few years ago, says<br />
David H<strong>on</strong>e, Shell’s group climate-change<br />
adv<str<strong>on</strong>g>is</str<strong>on</strong>g>er, and real<str<strong>on</strong>g>is</str<strong>on</strong>g>ed that there would be<br />
new products and new rules. It was in our<br />
interest to be part of the d<str<strong>on</strong>g>is</str<strong>on</strong>g>cussi<strong>on</strong>, in a<br />
c<strong>on</strong>structive way. Companies that were<br />
hostile to green regulati<strong>on</strong> were not going<br />
to be invited to the table, so those that<br />
wanted to be involved had to acquire<br />
some green credentials and aunt them.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g>re were indeed new rules, in the<br />
form of Europe’s Em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s-Trading<br />
Scheme, and industry did well to be involved<br />
in the d<str<strong>on</strong>g>is</str<strong>on</strong>g>cussi<strong>on</strong>s. Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts<br />
were arguing for a carb<strong>on</strong> tax. Industry<br />
wanted em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s limited by quantity,<br />
rather than by price. We didn’t want a1
<str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006 A survey of climate change 13<br />
2 tax, says a BP executive. We didn’t want a<br />
system in which the level was set by the<br />
budget decit rather than by the cost of<br />
carb<strong>on</strong>. Industry w<strong>on</strong>.<br />
Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts argued that the most ecient<br />
way to run the system would be to<br />
aucti<strong>on</strong> permits to emit CO 2. Industry<br />
wanted permits handed out free. Again, industry<br />
w<strong>on</strong>, and has proted nicely from<br />
the scheme. <str<strong>on</strong>g>The</str<strong>on</strong>g> fact that so many European<br />
polluters have d<strong>on</strong>e so well out of<br />
the ETS <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong>e reas<strong>on</strong> why some airline<br />
bosses, including Sir Richard Brans<strong>on</strong> of<br />
Virgin and Sir Rod Eddingt<strong>on</strong>, the former<br />
chief of Brit<str<strong>on</strong>g>is</str<strong>on</strong>g>h Airways, are arguing for a<br />
trading scheme for their industry; and<br />
why American companies are now less<br />
hostile to the idea than they were before<br />
the ETS started up.<br />
But there <str<strong>on</strong>g>is</str<strong>on</strong>g> more than just lobbying going<br />
<strong>on</strong>. Climate-change regulati<strong>on</strong>, and the<br />
prospect of more of it, <str<strong>on</strong>g>is</str<strong>on</strong>g> changing the way<br />
business thinks about carb<strong>on</strong> and leading<br />
it to invest in new areas.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> Shell greenhouse project <str<strong>on</strong>g>is</str<strong>on</strong>g> an example<br />
of how regulati<strong>on</strong> drives investment.<br />
Thanks to the ETS, says Mr H<strong>on</strong>e,<br />
CO 2 gets attenti<strong>on</strong> from people like oil-re-<br />
nery managers these days. <str<strong>on</strong>g>The</str<strong>on</strong>g>re’s a clear<br />
price signal. Projects to c<strong>on</strong>trol em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
are worth investing in.<br />
And there <str<strong>on</strong>g>is</str<strong>on</strong>g> a bit more investment in<br />
cleaner technology and renewable energy<br />
than there used to be. <str<strong>on</strong>g>The</str<strong>on</strong>g> wind business,<br />
for instance, <str<strong>on</strong>g>is</str<strong>on</strong>g> booming, thanks to subsidies<br />
in Europe and America. We’ve had a<br />
w<strong>on</strong>derful run, says Lorraine Bolsinger,<br />
head of GE’s green Ecomaginati<strong>on</strong> div<str<strong>on</strong>g>is</str<strong>on</strong>g>i<strong>on</strong>.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> business <str<strong>on</strong>g>is</str<strong>on</strong>g> growing at 18%.<br />
We’ve sold out to the end of 2008. We’re investing<br />
$70m annually in R&D.<br />
Flaunt it<br />
But the green-business boom needs to be<br />
kept in perspective. Take BP, which announced<br />
last November that it would be<br />
investing up to $8 billi<strong>on</strong> in renewables<br />
and alternatives over ten years. It sounds a<br />
lot, but at th<str<strong>on</strong>g>is</str<strong>on</strong>g> year’s rate of capital spending<br />
it would be <strong>on</strong>ly 4% of BP’s total over<br />
that period. Shell <str<strong>on</strong>g>is</str<strong>on</strong>g> spending $1 billi<strong>on</strong> <strong>on</strong><br />
renewables over ve years.<br />
GE has made much of Ecomaginati<strong>on</strong>,<br />
which <str<strong>on</strong>g>is</str<strong>on</strong>g> made up of 32 clean-technology<br />
products. Ecomaginati<strong>on</strong> recently announced<br />
revenues of $10 billi<strong>on</strong> last year,<br />
and forecast that at the current rate of<br />
growth they would r<str<strong>on</strong>g>is</str<strong>on</strong>g>e to $20 billi<strong>on</strong> by<br />
2010. R&D spending <strong>on</strong> Ecomaginati<strong>on</strong><br />
products <str<strong>on</strong>g>is</str<strong>on</strong>g> to r<str<strong>on</strong>g>is</str<strong>on</strong>g>e from $700m (out of a total<br />
of $5 billi<strong>on</strong> for GE as a whole) to $1.5<br />
billi<strong>on</strong> by 2010.<br />
A fair wind<br />
Ecomaginati<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> certainly ahead of the<br />
rest of the business, which <str<strong>on</strong>g>is</str<strong>on</strong>g> growing at<br />
around 6% a year. But there <str<strong>on</strong>g>is</str<strong>on</strong>g> a bit less to<br />
all th<str<strong>on</strong>g>is</str<strong>on</strong>g> than meets the eye. First, GE’s overall<br />
revenues are $150 billi<strong>on</strong>, so Ecomaginati<strong>on</strong><br />
does not loom very large. And sec<strong>on</strong>d,<br />
the div<str<strong>on</strong>g>is</str<strong>on</strong>g>i<strong>on</strong>’s products are not that<br />
dierent from the rest of GE’s oerings.<br />
To qualify as part of Ecomaginati<strong>on</strong>,<br />
says Ms Bolsinger, a product has to be both<br />
envir<strong>on</strong>mentally better or inherently<br />
green and also ec<strong>on</strong>omically better than<br />
what it’s replacing. But new products<br />
tend to be more ecient than old <strong>on</strong>es<br />
(which <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong>e reas<strong>on</strong> why rich countries’<br />
energy eciency increases by around 2% a<br />
year); and if some of that eciency <str<strong>on</strong>g>is</str<strong>on</strong>g> used<br />
to cut fuel c<strong>on</strong>sumpti<strong>on</strong>, they can be de-<br />
ned as envir<strong>on</strong>mentally better. It would,<br />
therefore, be surpr<str<strong>on</strong>g>is</str<strong>on</strong>g>ing if quite a lot of GE’s<br />
newer-generati<strong>on</strong> products were not envir<strong>on</strong>mentally<br />
better than the older <strong>on</strong>es.<br />
Indeed, much of the Ecomaginati<strong>on</strong><br />
product l<str<strong>on</strong>g>is</str<strong>on</strong>g>t <str<strong>on</strong>g>is</str<strong>on</strong>g> made up of new, somewhat<br />
more ecient, versi<strong>on</strong>s of old products.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> GEnx aero-engine, for instance, <str<strong>on</strong>g>is</str<strong>on</strong>g> 15%<br />
more fuel-ecient than the <strong>on</strong>e it <str<strong>on</strong>g>is</str<strong>on</strong>g> replacing.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> new Evoluti<strong>on</strong> rail engines are 4%<br />
more ecient. Both qualify as Ecomaginati<strong>on</strong><br />
products, but sound more like the c<strong>on</strong>sequence<br />
of run-of-the-mill product improvement<br />
than a green revoluti<strong>on</strong>.<br />
Shareholders should draw comfort<br />
from th<str<strong>on</strong>g>is</str<strong>on</strong>g>. If GE really were the revoluti<strong>on</strong>ary<br />
it makes itself out to be, it might be<br />
quite a r<str<strong>on</strong>g>is</str<strong>on</strong>g>ky investment. But the bet it <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
making <str<strong>on</strong>g>is</str<strong>on</strong>g> small and perfectly sensible.<br />
GE, BP, Shell and their peers all believe<br />
that governments will regulate CO 2 a bit<br />
more in the future than they have d<strong>on</strong>e in<br />
the past. That will tip the market towards<br />
greener technologies, and the modest investments<br />
they have made in envir<strong>on</strong>ment-friendly<br />
products will pay o. Th<str<strong>on</strong>g>is</str<strong>on</strong>g><br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> c<strong>on</strong>tingent investment, says Mr Mottershead.<br />
We think the political commitment<br />
to renewables around the world will<br />
grow, and we’ll have more of the answers<br />
than our competitors will. We’re happier<br />
with our positi<strong>on</strong> than we were three<br />
years ago, because the world seems more<br />
inclined to change.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g>re <str<strong>on</strong>g>is</str<strong>on</strong>g> some evidence that managers<br />
are rewarded for being green. We have<br />
made a notable attempt to make th<str<strong>on</strong>g>is</str<strong>on</strong>g> part<br />
of the way we analyse people, says Abby<br />
Cohen, Goldman Sachs’s chief American<br />
investment-portfolio strateg<str<strong>on</strong>g>is</str<strong>on</strong>g>t. When<br />
you look at the at-r<str<strong>on</strong>g>is</str<strong>on</strong>g>k industriesthose<br />
that make their living out of envir<strong>on</strong>mentally<br />
challenging businessessome players<br />
have made a much better job of moving<br />
the technology forward.<br />
Ms Cohen points to important pools of<br />
assetssuch as CalPERS, the Californian<br />
state employees’ pensi<strong>on</strong> fund, and<br />
CalSTRS, the Californian teachers’ pensi<strong>on</strong><br />
fundthat prefer to invest in green<br />
companies. <str<strong>on</strong>g>The</str<strong>on</strong>g> number of such investors<br />
may be increasing. At the rst c<strong>on</strong>ference<br />
of the Investor Network <strong>on</strong> Climate R<str<strong>on</strong>g>is</str<strong>on</strong>g>k,<br />
in 2003, participants represented assets of<br />
$600 billi<strong>on</strong>. Last year, they represented<br />
$2.7 trilli<strong>on</strong>.<br />
In a paper publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed last year in the Financial<br />
Analysts Journal, Jeroen Derwall<br />
of the RSM Erasmus University in Rotterdam<br />
and colleagues found that the average<br />
annual return between 1995 and 2003 <strong>on</strong> a<br />
portfolio of companies that ranked high<br />
<strong>on</strong> greenery was 12.2%, compared with<br />
8.9% for low-ranked companies. Maybe<br />
easier access to capital (which the green investors<br />
presumably oer) helps. Maybe it’s<br />
just that companies that are well-managed<br />
overall also tend to pay attenti<strong>on</strong> to their<br />
envir<strong>on</strong>mental prole. Either way, greenery<br />
seems to go with success. 7
14 A survey of climate change <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006<br />
Doing it their way<br />
American attitudes to global warming are complex, and are changing<br />
JAMES INHOFE, chairman of the American<br />
Senate’s envir<strong>on</strong>ment and public<br />
works committee, has described the<br />
threat of catastrophic global warming as<br />
the greatest hoax ever perpetrated <strong>on</strong> the<br />
American people. H<str<strong>on</strong>g>is</str<strong>on</strong>g> fellow Republican,<br />
Arnold Schwarzenegger, the governor of<br />
California, has a dierent take: I say the<br />
debate <str<strong>on</strong>g>is</str<strong>on</strong>g> over. We know the science. We<br />
see the threat. And we know the time for<br />
acti<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> now.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> passi<strong>on</strong>ate argument about climate<br />
change going <strong>on</strong> inside America <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
not always obvious to the rest of the world.<br />
Some greens in other countries tend to<br />
write America o because it chose not to<br />
ratify the Kyoto protocol, because the federal<br />
government has c<strong>on</strong>s<str<strong>on</strong>g>is</str<strong>on</strong>g>tently refused<br />
to adopt a mandatory system for restricting<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s, and because American<br />
public opini<strong>on</strong> <str<strong>on</strong>g>is</str<strong>on</strong>g> relatively indierent to<br />
global warming (see chart 5). Yet the politics<br />
of global warming in America are<br />
more complex than that, and are changing.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> federal government’s inacti<strong>on</strong> c<strong>on</strong>trasts<br />
with a urry of activity at lower levels<br />
of government. <str<strong>on</strong>g>The</str<strong>on</strong>g> mayor of Seattle<br />
has started an initiative to get cities to aim<br />
for Kyoto targets, and 279 cities have signed<br />
up. Seven north-eastern states have set up<br />
the Regi<strong>on</strong>al Greenhouse Gas Initiative<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s stabil<str<strong>on</strong>g>is</str<strong>on</strong>g>ati<strong>on</strong> followed by cuts,<br />
with a trading schemeand six western<br />
governors are agitating for federal acti<strong>on</strong>.<br />
California <str<strong>on</strong>g>is</str<strong>on</strong>g> particularly interesting, for<br />
two reas<strong>on</strong>s. First, the Hummer-driving<br />
Mr Schwarzenegger <str<strong>on</strong>g>is</str<strong>on</strong>g>, improbably, <strong>on</strong>e of<br />
the greenest politicians in the world. Th<str<strong>on</strong>g>is</str<strong>on</strong>g><br />
may in part reect h<str<strong>on</strong>g>is</str<strong>on</strong>g> pers<strong>on</strong>al c<strong>on</strong>victi<strong>on</strong>s,<br />
but also chimes with the views of<br />
Californians, who are much more envir<strong>on</strong>ment-minded<br />
than other Americans. Sec<strong>on</strong>d,<br />
the state has l<strong>on</strong>g experience of<br />
adopting tougher envir<strong>on</strong>mental regulati<strong>on</strong>s<br />
than other parts of America, and of<br />
gauging their ec<strong>on</strong>omic impact.<br />
On August 31st, California became the<br />
rst state to leg<str<strong>on</strong>g>is</str<strong>on</strong>g>late for cuts in greenhouse-gas<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>sby 25% by 2020. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
bill was opposed by most Republican leg<str<strong>on</strong>g>is</str<strong>on</strong>g>lators.<br />
Mr Schwarzenegger has also set a<br />
target for cutting em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s to 80% below<br />
1990 levels by 2050. (Oreg<strong>on</strong> has a target of<br />
75%, and the governor was clearly deter-<br />
Laid-back America<br />
% of people c<strong>on</strong>cerned* about global warming<br />
0 20 40 60 80 100<br />
Japan<br />
France<br />
Spain<br />
India<br />
Britain<br />
Germany<br />
China<br />
United States<br />
*”...a great deal” or “...a fair amount”; poll publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed June 2006<br />
Source: Pew Research Center<br />
mined not to let some northern girlie-man<br />
steal the crown of greenest governor.) By<br />
2010, 20% of California’s energy <str<strong>on</strong>g>is</str<strong>on</strong>g> to be<br />
generated from renewables.<br />
Allan Zaremberg, president of California’s<br />
Chamber of Commerce, says these<br />
targets will impose huge new costs <strong>on</strong> local<br />
businesses. <str<strong>on</strong>g>The</str<strong>on</strong>g>y will also cause CO 2heavy<br />
factories to migrate to developing<br />
countries where they will be subject to less<br />
stringent restricti<strong>on</strong>s and will therefore<br />
produce more CO 2.<br />
Similar complaints were heard in the<br />
1970s, when California imposed unusually<br />
tough em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s standards for other<br />
pollutants. Yet Mr Zaremberg c<strong>on</strong>cedes<br />
that business has beneted from tough<br />
clean-air regulati<strong>on</strong>s. <str<strong>on</strong>g>The</str<strong>on</strong>g>y have made<br />
California’s envir<strong>on</strong>ment more attractive,<br />
and the state has developed technologies<br />
for things like energy-ecient buildings<br />
that have subsequently been sold elsewhere.<br />
California’s ec<strong>on</strong>omic performance<br />
(despite power prices which, partly<br />
because of regulati<strong>on</strong>, are 40% above the<br />
American average) makes it hard to argue<br />
that business in the state <str<strong>on</strong>g>is</str<strong>on</strong>g> groaning under<br />
its heavy regulatory burden.<br />
California <str<strong>on</strong>g>is</str<strong>on</strong>g> also forging ahead <strong>on</strong> vehicle-em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
standards. In 2004 it became<br />
the rst American state to leg<str<strong>on</strong>g>is</str<strong>on</strong>g>late to<br />
cut carb<strong>on</strong>-dioxide em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s from vehicles.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> law stipulated that CO 2 em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
from vehicles had to be reduced by<br />
30% by 2016. Carmakers claimed that th<str<strong>on</strong>g>is</str<strong>on</strong>g><br />
would add $3,000 to the price of a car and<br />
5<br />
cost thousands of jobs. <str<strong>on</strong>g>The</str<strong>on</strong>g>y took California<br />
to court, where the matter <str<strong>on</strong>g>is</str<strong>on</strong>g> stuck.<br />
If the vehicle-em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s standards get<br />
through, ten other states say they will follow.<br />
Californian standards tend to spread<br />
around the world because no manufacturer<br />
wants to be shut out of the Californian<br />
market.<br />
Coming round<br />
Opini<strong>on</strong> in America as a whole <str<strong>on</strong>g>is</str<strong>on</strong>g> shifting a<br />
little in California’s directi<strong>on</strong>. Hurricane<br />
Katrina brought the <str<strong>on</strong>g>is</str<strong>on</strong>g>sue to the fore. Scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts<br />
had given warning that climate<br />
change might cause extreme weather<br />
events. Katrina dem<strong>on</strong>strated what such<br />
an eventfor which the government was<br />
unpreparedcould look like. Individuals<br />
thought about their safety; businesses<br />
about their balance sheets.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> White House’s sceptical stance lost<br />
credibility last year when it emerged that<br />
Phil Co<strong>on</strong>ey, chief of sta at the Council<br />
<strong>on</strong> Envir<strong>on</strong>mental Quality, had been editing<br />
scientic reports to emphas<str<strong>on</strong>g>is</str<strong>on</strong>g>e uncertainties<br />
in climate science. Mr Co<strong>on</strong>ey resigned<br />
and joined Exx<strong>on</strong> Mobil.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> steady drumbeat of stories attributing<br />
all manner of evil to climate change<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> getting louder: California burning (because<br />
the woods are too dry); ski resorts<br />
struggling (because the snow line <str<strong>on</strong>g>is</str<strong>on</strong>g> r<str<strong>on</strong>g>is</str<strong>on</strong>g>ing);<br />
alligators in Florida eating people (because<br />
their pools and thus their food supplies are<br />
drying up); polar bears eating each other<br />
(because melting ice makes it harder for<br />
them to hunt).<br />
Several of America’s wealthiest and<br />
best-organ<str<strong>on</strong>g>is</str<strong>on</strong>g>ed foundati<strong>on</strong>s have ra<str<strong>on</strong>g>is</str<strong>on</strong>g>ed<br />
the temperature by making climate change<br />
<strong>on</strong>e of their big <str<strong>on</strong>g>is</str<strong>on</strong>g>sues. <str<strong>on</strong>g>The</str<strong>on</strong>g> Hewlett Foundati<strong>on</strong>’s<br />
Hal Harvey and the Pew Center<br />
<strong>on</strong> Global Climate Change’s Eileen Claussen<br />
are key gures in comm<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>ing research<br />
and working <strong>on</strong> politicians. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
sceptics can call <strong>on</strong> funding from companies<br />
keen to avert federal acti<strong>on</strong>, but the<br />
green think-tanks outgun them. Myr<strong>on</strong><br />
Ebell of the Competititive Enterpr<str<strong>on</strong>g>is</str<strong>on</strong>g>e Institute,<br />
who calls them the forces of darkness,<br />
says they receive huge amounts of<br />
m<strong>on</strong>ey from charitable foundati<strong>on</strong>s. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
children and grandchildren of capital<str<strong>on</strong>g>is</str<strong>on</strong>g>t<br />
buccaneers are soft left.<br />
1
<str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006 A survey of climate change 15<br />
2 <str<strong>on</strong>g>The</str<strong>on</strong>g>ir activities have helped create a curious<br />
new alliance whose members d<str<strong>on</strong>g>is</str<strong>on</strong>g>agree<br />
about almost everything except<br />
global warming. Jim Woolsey, a Prius-driving<br />
former head of the CIA, who numbers<br />
himself am<strong>on</strong>g them, calls it a coaliti<strong>on</strong> of<br />
tree-huggers, sod-busters, cheap hawks<br />
and evangelicals.<br />
Sod-busters, explains Mr Woolsey, <str<strong>on</strong>g>is</str<strong>on</strong>g> a<br />
south-western term for farmers. Farming<br />
subsidies are c<strong>on</strong>tinually under threat, but<br />
when the federal government started subsid<str<strong>on</strong>g>is</str<strong>on</strong>g>ing<br />
ethanol producti<strong>on</strong> and wind<br />
power, farmers real<str<strong>on</strong>g>is</str<strong>on</strong>g>ed that renewable energy<br />
oers new streams of revenue. Turbines<br />
are a lucrative alternative to turnips.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> cheap hawks, which Mr Woolsey<br />
says include him, are c<strong>on</strong>cerned about the<br />
vulnerability of oil installati<strong>on</strong>s in the<br />
Middle East. Relying <strong>on</strong> th<str<strong>on</strong>g>is</str<strong>on</strong>g> unstable part<br />
of the world for th<str<strong>on</strong>g>is</str<strong>on</strong>g> very important part of<br />
our ec<strong>on</strong>omy <str<strong>on</strong>g>is</str<strong>on</strong>g> rather worrying. America<br />
does have coal, but coal supplies w<strong>on</strong>’t last<br />
forever, so demand for fossil fuels needs to<br />
be cut. Mr Woolsey, who backed the Iraq<br />
war, <str<strong>on</strong>g>is</str<strong>on</strong>g> <strong>on</strong> the adv<str<strong>on</strong>g>is</str<strong>on</strong>g>ory board of the Institute<br />
for the Analys<str<strong>on</strong>g>is</str<strong>on</strong>g> of Global Security,<br />
which argues for subsidies to make cars<br />
more fuel-ecient and for plant-based alternatives<br />
to petrol.<br />
Earlier th<str<strong>on</strong>g>is</str<strong>on</strong>g> year, Chr<str<strong>on</strong>g>is</str<strong>on</strong>g>tian evangelicals,<br />
who have a direct line to the White House,<br />
launched the Evangelical Climate Initiative,<br />
signed by 86 evangelical leaders, including<br />
Rick Warren, who runs a megachurch<br />
and wrote a bestseller, <str<strong>on</strong>g>The</str<strong>on</strong>g> Purpose-Driven<br />
Life. It says that milli<strong>on</strong>s of<br />
Where to start<br />
THE sheer number of scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts, ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>ts,<br />
businesspeople and policymakers<br />
working <strong>on</strong> climate change endows it<br />
with a kind of blitz spirit. Surely, given so<br />
much will and enthusiasm, we can defeat<br />
th<str<strong>on</strong>g>is</str<strong>on</strong>g> threat? Yet the projecti<strong>on</strong>s are not encouraging.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> c<strong>on</strong>centrati<strong>on</strong> of CO2 in the<br />
air has r<str<strong>on</strong>g>is</str<strong>on</strong>g>en from 280ppm before the industrial<br />
revoluti<strong>on</strong> to around 380ppm<br />
now, and the IPCC reck<strong>on</strong>s that if em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
c<strong>on</strong>tinue to grow at their current rate,<br />
by 2100 th<str<strong>on</strong>g>is</str<strong>on</strong>g> will have r<str<strong>on</strong>g>is</str<strong>on</strong>g>en to around<br />
800ppm. Depending <strong>on</strong> populati<strong>on</strong><br />
changes, ec<strong>on</strong>omic growth and political<br />
will, th<str<strong>on</strong>g>is</str<strong>on</strong>g> could be adjusted to somewhere<br />
between 540ppm and 970ppm. <str<strong>on</strong>g>The</str<strong>on</strong>g> pros-<br />
people could die in th<str<strong>on</strong>g>is</str<strong>on</strong>g> century because of<br />
climate change, most of them our poorest<br />
global neighbors.<br />
Not all evangelicals go al<strong>on</strong>g with th<str<strong>on</strong>g>is</str<strong>on</strong>g>.<br />
According to an opini<strong>on</strong> poll last year, 33%<br />
of evangelicals think hurricanes are a deliberate<br />
act of Godwhich presumably<br />
means that man should not mess with<br />
them. (Some 13% of n<strong>on</strong>-evangelical Protestants,<br />
15% of Catholics and, bizarrely,<br />
17% of n<strong>on</strong>-religious people agree.)<br />
Twenty-two leading evangelicals wrote to<br />
the Nati<strong>on</strong>al Associati<strong>on</strong> of Evangelicals<br />
asking it not to endorse the climate initiative.<br />
It didn’t.<br />
Two more important lobbies are coming<br />
round to the view that something<br />
needs to be d<strong>on</strong>e. Hunting and shooting<br />
lies close to the heart of the Bush admin<str<strong>on</strong>g>is</str<strong>on</strong>g>trati<strong>on</strong><br />
(as Dick Cheney showed when he<br />
accidentally peppered an old friend). One-<br />
fth of voters hunt or shoot, and twothirds<br />
of hunters and anglers vote Republican.<br />
In the rst poll of their views, carried<br />
out in May th<str<strong>on</strong>g>is</str<strong>on</strong>g> year, 76% of these sportsmen<br />
said they had pers<strong>on</strong>ally noticed climate<br />
change, and 78% said that the right<br />
way to address America’s energy needs<br />
was to c<strong>on</strong>serve more, develop fuel-ecient<br />
vehicles and use more renewables.<br />
Only 15% thought the right approach was<br />
to drill for more oil.<br />
Business <str<strong>on</strong>g>is</str<strong>on</strong>g> doing its bit. In April th<str<strong>on</strong>g>is</str<strong>on</strong>g><br />
year, eight big energy companies, including<br />
GE, Shell and the two largest owners of<br />
utilities in the United States, Exel<strong>on</strong> and<br />
Duke Energy, were being questi<strong>on</strong>ed by<br />
pect of anything much above 550ppm<br />
makes scient<str<strong>on</strong>g>is</str<strong>on</strong>g>ts nervous.<br />
In order to c<strong>on</strong>trol these gures, it <str<strong>on</strong>g>is</str<strong>on</strong>g> important<br />
to pick some priorities. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
sources of th<str<strong>on</strong>g>is</str<strong>on</strong>g> problem range from smokestacks<br />
through Amaz<strong>on</strong>ian deforestati<strong>on</strong><br />
to pig euent; from Mexico to Mauritania.<br />
But identifying the main countries and<br />
sectors resp<strong>on</strong>sible will help target eorts.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> widely held noti<strong>on</strong> that gas-guzzling<br />
cars are the core of the problem <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
wr<strong>on</strong>g. Transport (including planes and<br />
ships as well as cars) produces <strong>on</strong>ly 13.5%<br />
of em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s. <str<strong>on</strong>g>The</str<strong>on</strong>g> biggest c<strong>on</strong>tributor <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
power generati<strong>on</strong> (24.5%); and the biggest<br />
c<strong>on</strong>tributor am<strong>on</strong>g sources of power <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
the Senate Energy and Natural Resources<br />
Committee. Six of the eight said they<br />
would welcome or at least accept mandatory<br />
caps <strong>on</strong> their greenhouse-gas em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s.<br />
Wal-Mart was keen, too.<br />
Does all th<str<strong>on</strong>g>is</str<strong>on</strong>g> add up to federal leg<str<strong>on</strong>g>is</str<strong>on</strong>g>lati<strong>on</strong><br />
<strong>on</strong> mandatory c<strong>on</strong>trols? <str<strong>on</strong>g>The</str<strong>on</strong>g> progress<br />
of two bills says not yet. One, from Senators<br />
John McCain, a Republican, and Joseph<br />
Lieberman, a Democrat, has been<br />
voted <strong>on</strong> twice, and got slightly less support<br />
in the sec<strong>on</strong>d vote than in the rst. <str<strong>on</strong>g>The</str<strong>on</strong>g><br />
other, a comparatively modest proposal<br />
based <strong>on</strong> a scheme put together by the Nati<strong>on</strong>al<br />
Comm<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong> <strong>on</strong> Energy Policy for a<br />
cap-and-trade system with a price limit of<br />
$7 per t<strong>on</strong>ne, was part of an energy-bill<br />
amendment initially proposed by Je Bingaman,<br />
a Democrat, and Pete Domenici, a<br />
Republican. Mr Domenici backed away at<br />
the last moment. Earlier th<str<strong>on</strong>g>is</str<strong>on</strong>g> year he and<br />
Mr Bingaman publ<str<strong>on</strong>g>is</str<strong>on</strong>g>hed a white paper <strong>on</strong><br />
how a trading scheme might work.<br />
So <strong>on</strong> Capitol Hill the <str<strong>on</strong>g>is</str<strong>on</strong>g>sue <str<strong>on</strong>g>is</str<strong>on</strong>g> not dead<br />
but resting. Three things might wake it up:<br />
rst, a str<strong>on</strong>g performance by Democrats<br />
in the mid-term electi<strong>on</strong>s; sec<strong>on</strong>d, and<br />
more important, a new president. <str<strong>on</strong>g>The</str<strong>on</strong>g> favourites<br />
for the two parties’ nominati<strong>on</strong>s,<br />
Mr McCain and Hillary Clint<strong>on</strong>, both favour<br />
mandatory federal em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s c<strong>on</strong>trols.<br />
Third, the Supreme Court <str<strong>on</strong>g>is</str<strong>on</strong>g> to rule<br />
next year <strong>on</strong> whether the federal government<br />
has the right to c<strong>on</strong>trol carb<strong>on</strong>-dioxide<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s under the Clean Air Act.<br />
That will either pave the way for leg<str<strong>on</strong>g>is</str<strong>on</strong>g>lati<strong>on</strong><br />
or kill o the possibility. 7<br />
Technological and ec<strong>on</strong>omic soluti<strong>on</strong>s to climate change are available. <str<strong>on</strong>g>The</str<strong>on</strong>g> problem <str<strong>on</strong>g>is</str<strong>on</strong>g> politics<br />
Triangulating the future<br />
Greenhouse gases released*, per year, bn t<strong>on</strong>nes<br />
Currently projected path<br />
H<str<strong>on</strong>g>is</str<strong>on</strong>g>torical<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
STABILISATION<br />
WEDGES<br />
Flat path<br />
0<br />
1950 70 90 2010 30 50 60<br />
Source: Rob Socolow<br />
*Measured as the equivalent of<br />
the carb<strong>on</strong> in carb<strong>on</strong> dioxide<br />
15<br />
10<br />
5<br />
6<br />
1
16 A survey of climate change <str<strong>on</strong>g>The</str<strong>on</strong>g> Ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t September 9th 2006<br />
2<br />
Green Bush<br />
coal. Coal <str<strong>on</strong>g>is</str<strong>on</strong>g> cheap. Coal <str<strong>on</strong>g>is</str<strong>on</strong>g> dirty. America<br />
has lots of coal and China has vast reserves<br />
to fuel its ec<strong>on</strong>omic boom. And<br />
rocketing natural-gas prices have led to a<br />
boom in the building of coal-red power<br />
plants in recent years.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> sec<strong>on</strong>d-biggest source of em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> deforestati<strong>on</strong> (18%). <str<strong>on</strong>g>The</str<strong>on</strong>g> tendency to focus<br />
<strong>on</strong> fossil fuel explains why th<str<strong>on</strong>g>is</str<strong>on</strong>g> source<br />
gets left out when soluti<strong>on</strong>s are drawn up;<br />
and why campaigners are lobbying hard<br />
to get deforestati<strong>on</strong> included in the European<br />
Em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s-Trading Scheme.<br />
When it comes to the c<strong>on</strong>tributi<strong>on</strong> of<br />
individual countries, America <str<strong>on</strong>g>is</str<strong>on</strong>g> still the<br />
principal source of greenhouse gases, but<br />
China <str<strong>on</strong>g>is</str<strong>on</strong>g> closing in and India <str<strong>on</strong>g>is</str<strong>on</strong>g> coming up<br />
from behind. If those three and Europe<br />
took the problem seriously, there would<br />
be a good chance of solving it.<br />
But there <str<strong>on</strong>g>is</str<strong>on</strong>g> no silver bullet. If an answer<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> to be found, it lies in using a combinati<strong>on</strong><br />
of ec<strong>on</strong>omics and a broad range<br />
of technologies.<br />
Robert Socolow, an ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t at<br />
Princet<strong>on</strong> University, oers an encouraging<br />
way of thinking about th<str<strong>on</strong>g>is</str<strong>on</strong>g>. H<str<strong>on</strong>g>is</str<strong>on</strong>g> stabil<str<strong>on</strong>g>is</str<strong>on</strong>g>ati<strong>on</strong><br />
wedges (see chart 6, previous page)<br />
show how dierent ways of cutting em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
can be used incrementally to lower<br />
the trajectory from a steep and frightening<br />
path towards a horiz<strong>on</strong>tal <strong>on</strong>e that stabil<str<strong>on</strong>g>is</str<strong>on</strong>g>es<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s at their current level.<br />
One wedge might be carb<strong>on</strong> sequestrati<strong>on</strong><br />
(storing carb<strong>on</strong> dioxide underground<br />
or below the oceans) to deal with em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
from coal-red power plants.<br />
Sequestering CO 2 em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s might ra<str<strong>on</strong>g>is</str<strong>on</strong>g>e<br />
the price of coal-generated power by 50%,<br />
but coal <str<strong>on</strong>g>is</str<strong>on</strong>g> such a cheap source of power<br />
that it might still be attractive. And it may<br />
have huge potential: a paper just pub-<br />
l<str<strong>on</strong>g>is</str<strong>on</strong>g>hed by Harvard’s Daniel Schrag and colleagues<br />
argues that thousands of yearsworth<br />
of American em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s could be<br />
stored under American coastal waters.<br />
Another might be renewable energy<br />
sources. <str<strong>on</strong>g>The</str<strong>on</strong>g>y supply around 14% of world<br />
energy now and the gure <str<strong>on</strong>g>is</str<strong>on</strong>g> unlikely to increase<br />
sharply in the near future. But their<br />
share can r<str<strong>on</strong>g>is</str<strong>on</strong>g>e enough to bring the trajectory<br />
down a little.<br />
Ec<strong>on</strong>omics can help make these technologies<br />
viable. That can be d<strong>on</strong>e in two<br />
ways. One <str<strong>on</strong>g>is</str<strong>on</strong>g> to subsid<str<strong>on</strong>g>is</str<strong>on</strong>g>e early-stage R&D<br />
to bring down the price of alternatives.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> sec<strong>on</strong>d <str<strong>on</strong>g>is</str<strong>on</strong>g> to tax carb<strong>on</strong> (or set up a capand-trade<br />
system similar to Europe’s ETS)<br />
to push up the price of fossil fuels. Given<br />
that governments are reluctant to make<br />
themselves unpopular by taxing c<strong>on</strong>sumers<br />
or c<strong>on</strong>straining companies, there <str<strong>on</strong>g>is</str<strong>on</strong>g><br />
probably a need for a bit of both.<br />
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That leaves the hardest bit of the puzzle:<br />
the politics. <str<strong>on</strong>g>The</str<strong>on</strong>g> best soluti<strong>on</strong> would be to<br />
get the world’s biggest polluters to share<br />
the burden. Kyoto tried to do that, and<br />
failed. America, which <str<strong>on</strong>g>is</str<strong>on</strong>g> now allergic to<br />
the word, <str<strong>on</strong>g>is</str<strong>on</strong>g> not going to accept the protocol,<br />
and over time Europe will get fed up<br />
with paying for something that <str<strong>on</strong>g>is</str<strong>on</strong>g> doing no<br />
global good. So, in the short term, the<br />
world <str<strong>on</strong>g>is</str<strong>on</strong>g> faced with the choice of no soluti<strong>on</strong><br />
or a better-than-nothing approach<br />
that might improve over time.<br />
America <str<strong>on</strong>g>is</str<strong>on</strong>g> the key. If America does<br />
nothing, then the developing world’s big<br />
polluters will do nothing. If America decides,<br />
independently, to c<strong>on</strong>strain em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s<br />
at a federal level (and cap-and-trade<br />
<str<strong>on</strong>g>is</str<strong>on</strong>g> much likelier to be acceptable than anything<br />
that includes the dread word tax),<br />
then China and India might come to accept<br />
that they have as much to lose as everybody<br />
else, and that they should lead the<br />
rest of the developing world towards cutting<br />
em<str<strong>on</strong>g>is</str<strong>on</strong>g>si<strong>on</strong>s.<br />
Or America might restart the process of<br />
involving the rest of the world, possibly at<br />
a regi<strong>on</strong>al level, through the Asia-Pacic<br />
Initiative that it set up in competiti<strong>on</strong> to<br />
Kyoto. For the moment, the chances of that<br />
happening do not look great. But as the<br />
weather changes, so does the political climate.<br />
Another <str<strong>on</strong>g>heat</str<strong>on</strong>g>wave, another d<str<strong>on</strong>g>is</str<strong>on</strong>g>astrous<br />
hurricane seas<strong>on</strong>, and the pressure to<br />
take acti<strong>on</strong> will become harder to res<str<strong>on</strong>g>is</str<strong>on</strong>g>t. It<br />
would need a dierent name, of course:<br />
the Peoria Protocol, perhaps, or the Indianapol<str<strong>on</strong>g>is</str<strong>on</strong>g><br />
Initiative. Or what about the<br />
Crawford C<strong>on</strong>venti<strong>on</strong>, Mr Bush? That<br />
would stick the pers<strong>on</strong>al brand of the man<br />
who likes to enjoy the natural world at h<str<strong>on</strong>g>is</str<strong>on</strong>g><br />
ranch <strong>on</strong> America’s attempt to save it. 7<br />
Future surveys<br />
Countries and regi<strong>on</strong>s<br />
France October 28th<br />
Mexico November 18th<br />
Britain November 25th<br />
Business, nance, ec<strong>on</strong>omics and ideas<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> world ec<strong>on</strong>omy September 16th<br />
Talent October 7th<br />
Telecoms October 14th<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> brain December 23rd<br />
Previous surveys and a l<str<strong>on</strong>g>is</str<strong>on</strong>g>t of forthcoming<br />
surveys can be found <strong>on</strong>line<br />
www.ec<strong>on</strong>om<str<strong>on</strong>g>is</str<strong>on</strong>g>t.com/surveys