Chapter 8 - Costing Climate Change (cont.)
It would increase a further 7 per cent and 6 per cent respectively if nuclear is phased out, and wind and solar are limited to 20 per cent of energy supply. And it would increase a further 64 per cent if bioenergy fuels are not available, bringing a total of 8.6 per cent by 2100.
With emissions held at 550 parts per million (ppm), baseline costs are stated as 1.7 per cent. Hence, just as the costs of business-as-usual (Table 1) are small, so too are the estimated costs entailed in radically transforming the global economy to achieve the sought after abatement.
The implausibility of this, even with all the yet-to-be-developed technologies, is magnified once the uncertainties of these technologies’ performances are factored in. One notable mirage technology is carbon capture and storage (CCS), a program bankrolled in large part by the Australian Government which has recently considerably reduced the funding allocation for the program.
Even if the envisaged new or improved technologies were to be costless, the IPCC’s estimated losses to the global economy from the forced shift away from fossil fuels are greater than the costs of business-as-usual. Compounding this unfavourable deal is the question of the reliability of the avoidance cost estimates. Economic assessments of minor changes to economies or policy shocks can be modelled with passable degrees of accuracy. But the IPCC modelling attempts to estimate what amounts to a total reorganisation of production, transport and living conditions and to project these a century into the future.
An example of the economic reorganisation entailed is quantified in Figure 3, which shows over the coming fifteen years extraordinary improvements from unknown increases in energy efficiency, a collapse in spending in fossil fuel extraction and a massive reduction in power station investment. These projections also cover the developing economies which are even more resistant to suicidal economic policies than OECD countries.
Source: “Summary for Policymakers,” Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge: Cambridge University Press, 2014), 28.
Climate Change The Facts 2014