So now, finally, we have a government report on climate change that the money people can buy into. The science hasn't been enough these last 16 years, evidently. I say 16 years because that was when the first Intergovernmental Panel on Climate Change scientific assessment came out. It was obvious to many people who read it at the time that we would lose great chunks of the world's economy if global warming continued unabated. And back in 1990, shortly after the IPCC report, I edited Global Warming: The Greenpeace Report, published by the Oxford University Press, which said much of what the Stern review now says.
Our book also warned, in stark terms, of the threat posed by the "positive feedbacks" built into the climate system. The impact of these is what the Stern review refers to when it says in its summary: "If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more." Twenty per cent of global GDP adds up to nearly £4 trillion per year. Hence the Observer front page headline on Sunday: "£3.68 trillion: The prince of failing to act on climate change."
It strikes me as increasingly strange that economists persist with measurements in GDP. GDP includes the economic activity associated with cleaning up Exxon's oil spills and the spillages from slurry pits left by mountain-top coal mining in the Appalachians. It includes all those legal fees for the lawyers chasing down possible criminal charges against BP over exploding refineries and leaking pipelines. It counts many other facets of our self-destructive modus operandi as some kind of asset in this way. When are we going to see an economic assessment of the damage unmitigated global warming will do to the natural capital we will need if we are to fashion a survivable future?
As for the Stern conclusion that we face global recession if we don't act, am I missing something here? We know that global warming is melting the Greenland ice cap fast. We know that water is pouring down crevasses in the interior of the sheet. We know that this water will lubricate the base of the sheet. If that sheet slides off the continent into the ocean, global sea level will rise by about 7m. Goodbye coastal plains - which is where virtually the entire world economy does business, if we discount a few ski resorts and the like. That one impact stands to cause something more than a global recession.
Then there is the prospect of a global insurance crash, about which I have commented earlier in this blog. That could bring down the capital markets, and with them the world's pension system.
I have not yet read the full 700 pages, but from the summary, it is clear to me that the Stern review has pulled punches, just as the original IPCC report did in 1990. Unabated global warming could not just damage the global economy, but utterly destroy it.
As for the cost of abatement, which the Stern review calculates at a precise £184bn per year, consider this: the oil industry needs to invest £120bn a year just to keep pace with the current rate of growth in oil demand. That doesn't count the cost of fixing all the leaking pipelines and making the ageing refineries safe, nor the legal fees for staying out of jail in the process.
