Economics and Global Warming: April IPCC Report

Last Febuary, I addressed some of the issues surrounding the WTO and the February release of the IPCC report. A few days ago, Working Group Two released the draft of the second part of the IPPC Report: Summary for Policy Makers, dealing with climate change impacts, adaptation, and vulnerability.

I strongly suggest that everyone read this latest report, very sobering indeed. Climate change is here, now, and working its wicked magic all around us. Remember, this is a conservative report, having been passed through a number of bureaucratic hands. To get some idea of the wrangling over this report and how much it has been watered down, read Global politics shift as experts say warming is setting in:

Many delegates said they were disappointed to see parts of the report toned down under pressure from countries including Russia, Saudi Arabia and particularly China, which argued that some of the findings in the main study – based on 29,000 sets of data – were not solid enough to form part of the summary.

Hallegatte said that one reason the meeting went through the night was that some European delegates had demanded that the final report reflect the needs for cutting back on greenhouse gases-not just adapting to new conditions.

Stephen Schneider, a climatologist at Stanford University, said Russia and China were among the countries that opposed inclusion of the mitigation scenarios supported so strongly by Europe. He said the United States had asked that statements about ice sheets be removed but that the “Americans were much more helpful than they were harmful.”

Here are some of the highlights of the report:

• Increased drought in some areas; increased flooding from rainfall and runoff in others.
• Decreased water supplies because of glacier and snow pack disappearance, affecting one-sixth of the world’s population.
• Increased acidification of the ocean. See my pH post as well as my WTO post. Fish stocks are already precariously declining because of over-fishing. Global warming will be the nail in the coffin.
• Increased danger to terrestrial life as habitats change. We are talking of the extinction of thousands of species here. One study in Nature, after sampling 20% of the terrestrial surface, found that between 18% to 35% of species in those areas will be committed to extinction by 2050, within the lifetime of many people who read this blog. We are not talking just a few majestic polar bears and cute harp seals here.

For the U.S. in particular, water shortages are growing in the West and Southwest. We may be seeing the beginnings of a new dust bowl. Lake Mead has already dropped more than 80’feet. A New York Times article, An Arid West No longer Waits for Rain, provides an excellent overview of the problems now facing the West and Southwest. Water is becoming a critical issue in American life.

Reading the latest IPCC report, you may not get a vivid sense of the vast changes already occurring. Such reports are purposively neutered and dry. Nonetheless, the changes are real and growing in lethality. Not a great of time is left.

Althought the IPCC meets in plenary session each year, its major reports are five to six years apart, making the next major one possibly due in 2012. By 2012, China, India, and the United States are expected to dump an extra 2.7 billion tons of carbon into the atmosphere, with China adding an additional 562 coal burning plants. And by 2012, Kyoto was expected to reduce CO2 emissions 483 millions tons. My math tells me that in those three countries alone global Kyoto shortfall will be about 2.2 billion tons of greenhouse gases. As weak and as noble a goal as it was, Kyoto will never happen. And Kyoto was the result of the second IPCC report.

Two strands are converging: Global Warming and a dangerous economic model embodied by the IMF and economic globalization principles based on greed and consumption. Iraq is a sideshow; terrorism, a diversion. Despite what the Chinese or the Americans or the Russians or the Saudis think about their place in history, this century will not be their show. Nature is coming to bat; she bats only for her team, no one else’s.

Running parallel to the above strands are two other forces: IT and the incredible explosion of knowledge in almost every area of learning. From academic disciplines to corporations to countries, vast amounts of information are being collected and assimilated. IT feeds the explosion and processing of knowledge…it is driving this incredible renaissance in a self-perpetuating cycle. IT and the growth of knowledge feed globalization. But at the same time, they are providing us with the tools with which to understand how we are changing the planet.

Whether one set of forces will contain and control or propel the other is a very big question for me. Will our knowledge help us or be used to further endanger us? Will it serve purely economic interests or the interests of us all? The next ten or twenty years will tell the story.

Exogenous variables will and must move front and center in all economic models. The “free” market place will and must be seen as the last place to entrust the future well being of the peoples of the earth. So, too, will right-wing thinking about birth control and abortion. Either we control population growth, or it will control us. Either we control our pollution or it will control us. The species of a population can crash when its success destroys its own environment. If this possibility is not part of economic theory, it should be.

My complaint with economics, which I consider to be the key player in the future of the planet, is that it has not paid enough attention both in theory and in fact to the effect that the presently espoused principles of the market place are having on the world around us. In not always addressing environmental issues in trade and commerce,we are endangering the lives of everyone. Privatization of resources is an immense danger. We have enshrined greed, consumption, and profit almost as first principles, from which all good will flow.

The market place is myopic, sensitive only to immediate fluctuations in the economic environment. Other considerations are rarely within its ken: the environment and the depletion of resources, and population growth. What if glaciers are melting, endangering one-sixth of the world’s population? What if fish and terrestrial life forms are in danger? What if the seas rise and storms increase in number? Keep your eye only on your business and profit; companies must grow; money must be made. Look only a few feet ahead. More people means bigger markets. The ominous gathering clouds seem too distant. Besides, how could that approaching storm be our creation? Blame anything else, not ourselves. Blame the sun; blame a “raptur”-“us” God. But certainly never blame economic first principles.

Note: Below are some definitions and facts that may be helpful:

IPCC: Intergovernmental Panel on Climate Change, established by the WMO (World Meteorlogical Organization) and UNEP (United Nations Environmental Programme). The IPCC was established in 1988.

Purpose of the IPCC: To be an objective and authoritative source of information concerning climate change: its causes, its environmental and socio-economic impacts, and possible mitigation strategies.

IPCC Reports:

• First Report: 1990
• Second Report: 1995, which led to the Kyoto Protocol
• Third Report: 2001
• Fourth Report: 2007
• Fifth Report: ?

For more information, see here and here.