Here is comment out today that states suggestions in The Garnaut Climate Change Review should not be anything like as severe as some groups are saying.
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8/09/2008 - The costs of reducing greenhouse gas emissions don't look so big when seen from up close.
There is a widespread fear that measures to mitigate Australia's contribution to global warming would wreck the economy.
The best guess of the Garnaut Climate Change Review, updated on Friday with the release of a supplementary draft report on targets and trajectories, is that proposed mitigation measures will cause gross national product (GNP) to grow about one tenth of a percentage point slower over the remainder of the century.
That's after an initial setback of about 0.8 percentage points when an emissions trading scheme is introduced.
Of course the important thing to remember is that's a comparison with a mythical future.
In that fantasyland, economic growth goes ahead with no adverse effects from unchecked global warming - no increase extreme weather, no rising sea levels, nor any of the social or environmental catastrophes that would accompany them.
The appropriate comparison is an alternative "do-nothing" future where those costs, including the risk of even more extreme scenarios, are taken into account.
Unmitigated climate change would mean GNP at the end of the century would be about 10 per cent less than it would be in a mythical scenario with no global warming.
The cost to Australia of reining in greenhouse gas emissions would leave GNP down only slightly less, compared with the mythical benchmark, by 2100.
But this does not tell the whole story.
For one thing, despite the costs of mitigation, GNP growth would be accelerating away from potential growth under the "do-nothing" scenario by around 2060, according to the Garnaut Review's modelling.
Restriction of greenhouse gas emissions is an economic gift that keeps on giving whereas the costs of doing nothing continue to grow.
Not all that giving can be measured easily.
GNP (gross domestic product adjusted for international income flows) is not the only measure of costs and benefits.
Professor Garnaut and his crew have identified four types of costs associated with global warming.
The first is the direct market costs that can be incorporated into economic models.
The second is market costs that can be estimated but not slotted directly into models thanks to lack of reliable data.
Garnaut's projections include both the first and second types.
They do not include the third and fourth.
The third is the risk of "large and possibly catastrophic damage from severe outcomes".
Garnaut refers to this as the "insurance value" - what people would be prepared to pay to insure against the risks if it were known.
The fourth type of cost from global warming is those outcomes without a market value, at least within Australia - including damage to the environment and lifestyles, species extinction and damage to the environment outside Australia.
Both types three and four are not included in Garnaut's modelling, but avoiding them still has a value, even if it can't be measured easily.
There is plenty of reason to be pessimistic about the outlook for the world's climate.
The bickering and lack of good faith perennially undermining world trade negotiations do not augur well for optimism.
On the other hand, the costs to the economy in the early stages are relatively minor.
Soon after the middle of the century the benefits - compared with doing nothing and hoping the problem will go away - will turn positive and continue to build.
That's even ignoring those hard-to-measure and non-monetary benefits.
So at least the economic argument against Australia leading by example on climate change should not stand in the way of a global solution.
Source: AAP NewsWire
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