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1 Submission to the Board of Inquiry on the Mackays to Peka Peka Expressway Proposal To be presented: 9 January 2013 Submitter: Paul Young, on behalf of Generation Zero About Generation Zero 1. Generation Zero is a national network of young New Zealanders formed in 2011 to address the lack of action on climate change by formulating and implementing a vision for rapid movement to a zero carbon future. 2. Generation Zero has no formal membership requirements. However, we estimate that Generation Zero has more than 100 active volunteers and 2,000 supporters nationwide. Last month we ran a 3-day youth summit, alongside 350 Aotearoa, which brought together more than 700 young people aged 16-30 from around New Zealand and the Pacific Islands to Auckland. 3. Generation Zero believes that we have entered a new era in which resource constraints and environmental limits will truly bite. Climate change is more than just a reality; the more we learn through science, the more we discover how serious the problem is and how little time we have to act. The consequences will define our lives and span centuries. 4. In New Zealand, we currently have no credible plan to kick the fossil fuel habit and cut our greenhouse gas emissions. As young people, we are set to pick up the tab for this stunning lack of action. 5. In relation to transport projects, Generation Zero supports those projects that take the issue of climate change seriously and consider the risks associated with taking a “business as usual” approach to transportation. About the submitter 6. My name is Paul Young and I am the policy coordinator of Generation Zero. I have first class honours and Master of Science degrees in physics from the University of Otago. I currently reside in Mount Victoria, Wellington. Introduction

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Submission to the Board of Inquiry on the Mackays to Peka Peka Expressway Proposal

To be presented: 9 January 2013Submitter: Paul Young, on behalf of Generation Zero

About Generation Zero

1. Generation Zero is a national network of young New Zealanders formed in 2011 to address the lack of action on climate change by formulating and implementing a vision for rapid movement to a zero carbon future.

2. Generation Zero has no formal membership requirements. However, we estimate that Generation Zero has more than 100 active volunteers and 2,000 supporters nationwide. Last month we ran a 3-day youth summit, alongside 350 Aotearoa, which brought together more than 700 young people aged 16-30 from around New Zealand and the Pacific Islands to Auckland.

3. Generation Zero believes that we have entered a new era in which resource constraints and environmental limits will truly bite. Climate change is more than just a reality; the more we learn through science, the more we discover how serious the problem is and how little time we have to act. The consequences will define our lives and span centuries.

4. In New Zealand, we currently have no credible plan to kick the fossil fuel habit and cut our greenhouse gas emissions. As young people, we are set to pick up the tab for this stunning lack of action.

5. In relation to transport projects, Generation Zero supports those projects that take the issue of climate change seriously and consider the risks associated with taking a “business as usual” approach to transportation.

About the submitter

6. My name is Paul Young and I am the policy coordinator of Generation Zero. I have first class honours and Master of Science degrees in physics from the University of Otago. I currently reside in Mount Victoria, Wellington.

Introduction

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7. In our brief written submission we said that we were concerned about the decline in public transport patronage and the role the project will play in overall promotion of unsustainable resource use and increased greenhouse gas emissions.

8. This presentation expands briefly on that, particularly in light of evidence the Board has heard from others about modelling for the impact of greenhouse gas emissions over the lifetime of the project.

9. We understand that there is dispute about whether greenhouse gas emissions from this project can be taken into account because of amendments to the RMA which have attempted to leave these matters to the ETS.

10. However, as our submission noted, the efficient use of natural and physical resources and efficiency of the end-use of energy (s7(b) and s7(ba)) have to be considered. This is done within an overall context of sustainable development and in particular whether it will manage “the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural well-being and for their health and safety” (s5(2)).

11. You also have to consider the effects of climate change on the project (s7(i)).

Physical impacts of climate change

12. This project has an expected life of many years - on the order of a century or more - a time period in which significant climate change impacts are near certain.

13. You have uncontested evidence before you from Professor Martin Manning that, during the operational life of the project, climate change could result in dramatic changes in rainfall and flooding on the Kapiti Coast.

14. In his presentation to you on 4 December last year, Professor Martin Manning included reference to a scientific rule of thumb that for some coastal areas, which could include significant parts of the area between the Waikanae River and Waimeha Stream, what is currently a 100-year return flood event would be expected to occur “several times a year” after sea level has risen by 0.5 metres1:

15. "As a rule of thumb, a 0.1 m rise in sea level increases the frequency of flooding by about a factor of three. This effect is multiplicative so that even a relatively modest increase in mean sea level of 0.5 m will increase the frequency of flooding by a factor of roughly 300. This

1 See Attachment B, slide entitled “A rise in the water table increases flood risk”. http://www.epa.govt.nz/Publications/04-12%20Martin%20Manning.pdf

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means that an event which presently only happens on average once every 100 years (the ‘100-year return event’) will happen several times a year after sea level has risen by 0.5 m."

16. According to a graph provided in Professor Manning’s presentation, 0.5 m of sea level rise is projected to occur by as early as 2060,and even the low end of the range shows this occurring by 21002.

17. Due to the inertia of the climate system, and of global energy systems, some extent of these impacts is already ‘locked in’. Changes of this order are likely to occur even within the internationally agreed objective of limiting global average temperature increase to less than 2 degrees, to which the NZ Government has committed. As Article 1 of the Copenhagen Accord records3:

18. “To achieve the ultimate objective of the Convention to stabilize greenhouse gas concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system, we shall, recognizing the scientific view that the increase in global temperature should be below 2 degrees Celsius, on the basis of equity and in the context of sustainable development, enhance our long-term cooperative action to combat climate change.”

19. However, as we will soon elaborate on, we can no longer rely on the belief that global warming will be contained to two degrees.

Risk management

20. This leads me to an important point. In opening legal submissions, the NZ Transport Agency noted that4: “During expert conferencing, the [surface water] experts recommended to include sensitivity testing for high range climate change scenarios to 2115.” This suggests to us that the NZTA agrees that high range climate scenarios ought to be considered in terms of their physical impacts.

21. We also note that considering plausible worst case scenarios is part of the standard approach to risk assessment under the RMA. For example, the recently released Board of Inquiry report into the King Salmon proposal5 heavily criticised the applicant for notundertaking plausible worst case scenario testing for discharges of contaminants:

2 See Attachment B, slide entitled ‘The uncertainty is now when, rather than how much”.3 See Attachment A. http://unfccc.int/resource/docs/2009/cop15/eng/11a01.pdf4 Paragraph 402, http://www.epa.govt.nz/Publications/MACK%20-%20NZTA%20Opening%20Submissions.pdf5 http://www.epa.govt.nz/Resource-management/king-salmon/Pages/Draft-report-and-decision.aspx

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22. “[406] The scenarios modelled are for the “maximum initial feed discharge” in the proposed conditions of consent. While these levels are increased by 50% to demonstrate the impact of summer loadings Mr Knight has not modelled the “maximum feed discharge” also set out in the proposed conditions. He explained that these levels may never be reached and the intention was to take an adaptive management approach. We are somewhat astounded and cannot understand why these maximum discharges were not modelled to give the truly worst case scenario for nutrient additions and the potential effects at both local and Sounds wide scale.

23. “[438] We accept that the modelling of the nutrients introduced to the water column is conservative for the scenarios presented to us. However those scenarios were generally for the initial feed rates for each farm and, for some of the modelling, the (higher) summer loadings. The applications for each salmon farm seek almost double this feed level – the maximum conceivable feed levels as listed in the proposed conditions of consent. The approach taken was in marked contrast to the modelling of effects on the benthos which used these maximum feed levels. This astonishing gap in the prediction of effects on the environment cannot be explained away by emphasising that the modelling is conservative and nor can it simply be filled by invoking adaptive management. It is a fundamental failing in the assessment of effects on the environment that we would not expect to see in a project of this magnitude and importance.”

24. These criticisms seem to echo the concerns of Professor Manning in relation to this project: physical impacts of climate change and sea level rise have not been adequately considered and thus the worst-case scenario has not been considered. We would point out that by 2115, according to Professor Manning’s graph, sea level rise may have risen by as much as 1.5 metres, which from his evidence would mean current 100-year return flood events happening with appalling frequency.

Economic impacts of climate change

25. The key issue we wish to raise is this: we consider that there is another failing here to properly consider the effects of climate change on the project. While high range climate change scenarios are apparently being tested in relation to water flows affecting the integrity of the structures, they are not discussed at all in relation to the overall utility and the expected benefits for the communities that would use it. In other words, flow-on economic impacts of the physical impacts are neglected in the analysis.

26. A key question is, what benefits will this project provide to the communities on the Kapiti coast and the Wellington region under high range climate change scenarios within the operational lifetime of the project?

27. We wish to bring to the attention of the Board four economic reports that we believe suggest answers to this question, or at least ways to approach it. We accept that we are not

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economists and have not provided expert economic evidence. Nevertheless, we refer to these reports because they are well-known and provide indications of the way in which this matter could be approached.

28. The first is a short report by the international accounting firm PriceWaterhouseCoopers, “Too late for two degrees?”6. This report reinforces the message from numerous other scientific studies that the task of limiting global average temperature rise to 2°C above pre-industrial levels is now very challenging and will border on impossible if the world continues to delay serious mitigation action for even just a few more years.

29. “Even doubling our current rate of decarbonisation, would still lead to emissions consistent with 6 degrees of warming by the end of the century. To give ourselves a more than 50% chance of avoiding 2 degrees will require a six-fold improvement in our rate of decarbonisation. […] Now one thing is clear: businesses, governments and communities across the world need to plan for a warming world – not just 2°C, but 4°C, or even 6°C.”7

30. The second report is by the World Bank, entitled “Turn Down the Heat. Why a 4°C World Must Be Avoided”8, and was also released late last year. It demonstrates that the current track for global emissions has a high risk of producing a world more than four degrees warmer by 2100 and exceeding two degrees by 2050.

31. While the World Bank report notes that developing countries will have a harder time adapting than developed nations, it considers that such a temperature rise is potentially devastating for most economic activity:

32. “[...] Given that uncertainty remains about the full nature and scale of impacts, there is also no certainty that adaptation to a 4°C world is possible. A 4°C world is likely to be one in which communities, cities and countries would experience severe disruptions, damage, and dislocation, with many of these risks spread unequally. It is likely that the poor will suffer most and the global community could become more fractured, and unequal than today.”9

33. The third report is the “Stern Review - The Economics of Climate Change”10, prepared for the British Government in 2006, which attempted to put some numbers around the problem. It reported:

6 See Attachment C. http://www.pwc.com/en_GX/gx/low-carbon-economy-index/assets/pwc-low-carbon-economy-index-2012.pdf7 Page 1 (p8 of Attachments).8 See Attachment D. http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/12/20/000356161_20121220072749/Rendered/PDF/NonAsciiFileName0.pdf9 Page xviii (p22 of Attachments).10 See Attachment D. http://www.hm-treasury.gov.uk/d/Executive_Summary.pdf

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34. “Most formal modelling in the past has used as a starting point a scenario of 2-3°C warming. In this temperature range, the cost of climate change could be equivalent to a permanent loss of around 0-3% in global world output compared with what could have been achieved in a world without climate change. Developing countries will suffer even higher costs.

35. […] With 5-6°C warming - which is a real possibility for the next century - existing models that include the risk of abrupt and large-scale climate change estimate an average 5-10% loss in global GDP, with poor countries suffering costs in excess of 10% of GDP. Further, there is some evidence of small but significant risks of temperature rises even above this range. Such temperature increases would take us into territory unknown to human experience and involve radical changes in the world around us.”11

36. It also stated:

37. "In summary, analyses that take into account the full ranges of both impacts and possible outcomes - that is, that employ the basic economics of risk - suggest that BAU climate change will reduce welfare by an amount equivalent to a reduction in consumption per head of between 5 and 20%. Taking account of the increasing scientific evidence of greater risks, of aversion to the possibilities of catastrophe, and of a broader approach to the consequences than implied by narrow output measures, the appropriate estimate is likely to be in the upper part of this range."12

38. Finally, the fourth report is another released late last year entitled “Climate Vulnerability Monitor: A Guide to the Cold Calculus of A Hot Planet”13, by the DARA group and the Climate Vulnerable Forum. This analysis also produces estimates of the economic cost of climate change impacts, stating that this is already causing losses on the order of 1% of global GDP and predicting a rise to 2.5% by 2030:

39. “Climate change caused economic losses estimated close to 1% of global GDP for the year 2010, or 700 billion dollars (2010 PPP). The carbon-intensive economy cost the world another 0.7% of GDP in that year, independent of any climate change losses. Together, carbon economy- and climate change-related losses amounted to over 1.2 trillion dollars in 2010.

40. “The world is already committed to a substantial increase in global temperatures – at least another 0.5° C (1° F) due to a combination of the inertia of the world’s oceans, the slow response of the carbon cycle to reduced CO2 emission and limitations on how fast emissions can actually be reduced. The world economy therefore faces an increase in pressures that are estimated to lead to more than a doubling in the costs of climate change by 2030 to an estimated 2.5% of global GDP. Carbon economy costs also increase over this

11 Page ix (p26 of Attachments).12 Page x (p27 of Attachments).13 See Attachment F. http://daraint.org/wp-content/uploads/2012/09/CVM2ndEd-FrontMatter.pdf

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same period so that global GDP in 2030 is estimated to be well over 3% lower than it would have been in the absence of climate change and harmful carbon-intensive energy practices.”14

41. Taken together, we consider that the evidence shows a high level of certainty that climate change will have some negative impact on economic growth, and there is significant risk of very large impact. The relevance to this project is that such economic impacts would have clear flow-on effects on the forecast traffic volumes used to justify the project. Effects can be expected not only from local physical impacts - it is hard to imagine that the kind of increase in flood frequencies suggested by Professor Manning would not cause significant disruption to traffic and economic activity - but also indirectly due to the health of the global economy, on which New Zealand depends as a heavily trade-reliant nation.

42. However, we have looked at the NZTA’s traffic modelling report15 and found no mention of climate change, let alone these matters just described. Following a standard risk assessment approach, and for consistency with the agreed position to model high-end climate scenarios for physical impacts, it would seem only logical to conduct sensitivity testing on these economic effects of climate change.

43. The reports I have referenced are well-known and come from highly credible institutions, and we strongly feel that they are worthy of consideration here and should not be treated as speculative. We certainly accept that robust numbers are very hard to determine on this issue, but the evidence presented suggests that a reduction in regional GDP on the order of 5% by 2030 (from the baseline projection) due to climate change effects is entirely plausible as a worst-case scenario. For projections further out in time, a larger number would be appropriate.

The need to decarbonise the economy

44. A final related point to consider in addition is that, on the other side of the coin, requirements to decarbonise the economy will likely see further reductions to the forecast traffic volumes. If global political commitment to the two degree goal is to be taken seriously, this will require swift and dramatic action to reduce fossil fuel use and greenhouse gas emissions. New Zealand currently has commitments to reduce net greenhouse gas emissions to 10-20% below the 1990 gross level by 2020, and 50% by 2050. However, gross emissions are currently about 20% higher than in 199016. The land transport sector will be a focus given it

14 Page 17 (p30 of Attachments).15 Technical Report 34, http://www.nzta.govt.nz/projects/mackays-to-peka-peka-application/docs/technical-report-34.pdf16 Ministry for the Environment, New Zealand’s Greenhouse Gas Inventory 1990-2010, http://www.mfe.govt.nz/publications/climate/greenhouse-gas-inventory-2012/greehouse-gas-inventory-2012.pdf

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is the largest contributor to carbon dioxide emissions: about 40% of the total. As transport by car and truck is approximately 3-4 times less energy efficient compared to buses, rail or coastal shipping17, it is almost certain that decarbonisation efforts will involve policy action to shift people and freight to these transport modes.

45. We accept that numbers are even harder to come by on this matter. Our point is simply that, in our view, it is a dead certainty that the future will see some combination of economic impacts due to climate change, and increasing pressure to decarbonise the economy resulting in domestic policy. Both of these will act in the direction to reduce predicted traffic volumes.

46. With this context in mind, we feel compelled to make a final remark on the project, which NZTA’s modelling suggests will cause a net decrease in overall public transport usage of 6-7%18, at large opportunity cost of projects that could be putting us on the path to decarbonisation as required to avoid dangerous climate change. In our view, this is a perverse misallocation of resources, and is in contradiction with s5(2) of the RMA.

Conclusion

47. To conclude, our argument can be summarised as follows.

47.1. It is accepted that climate change will have impacts on the project and these must be considered under the RMA.

47.2. NZTA has accepted that it is appropriate to model plausible high-end climate change scenarios for the physical impacts for sensitivity testing.

47.3. Sea level rise estimates consistent with high warming pathways are routinely used in planning for physical impacts.

47.4. It is highly plausible (and we believe near certain) that such high warming scenarios would be accompanied by large negative impacts on the global and local economy, and hence the traffic volume estimates used to justify the project.

47.5. Studies from authoritative sources say that even under low warming scenarios (which we are now committed to with a high degree of certainty) there is a risk of significant economic impact worthy of consideration.

17 Ministry of Business, Innovation and Employment, New Zealand Energy Greenhouse Gas Emissions 2011, http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/energy-data-and-modelling/publications/energy-greenhouse-gas-emissions.pdf18 See p65, Technical Report 34.

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47.6. In addition, we believe consideration ought to be given to the likelihood that requirements to decarbonise the economy, even in line with existing government position, will result in future policy action to deliberately reduce road traffic volumes.

47.7. We accept that there is considerable uncertainty around the magnitude of these impacts on the economy and on traffic volumes.

47.8. However in robust risk assessment, uncertainty around magnitude is not an excuse for exclusion.

47.9. We hold that there is no logical case for neglecting to consider potential impacts of climate change on future traffic volumes.

47.10. We believe that, consistent with the approach taken for physical climate change impacts, NZTA should at minimum conduct sensitivity tests to consider plausible high-end economic impact as a result of climate change, in line with credible published estimates.

48. In our view, the justification for this project is already very weak, and we ask you to decline these applications on the grounds that the justification is based on flawed and incomplete analysis.

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GE.10-60563

UNITED NATIONS

Distr. GENERAL FCCC/CP/2009/11/Add.1

30 March 2010

Original: ENGLISH

CONFERENCE OF THE PARTIES

Report of the Conference of the Parties on its fifteenth session, held in Copenhagen

from 7 to 19 December 2009

Addendum

Part Two: Action taken by the Conference of the Parties

at its fifteenth session

CONTENTS

Decisions adopted by the Conference of the Parties Decision Page

1/CP.15 Outcome of the work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention ............. 3

2/CP.15 Copenhagen Accord ................................................................. 4

3/CP.15 Amendment to Annex I to the Convention............................... 10

4/CP.15 Methodological guidance for activities relating to reducing emissions from deforestation and forest degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries . 11

5/CP.15 Work of the Consultative Group of Experts on National Communications from Parties not included in Annex I to the Convention ..................................................................... 13

6/CP.15 Fourth review of the financial mechanism............................... 17

7/CP.15 Additional guidance to the Global Environment Facility ........ 21

ATTACHMENTS P 1

Tom
Typewritten Text
ATTACHMENT A
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FCCC/CP/2009/11/Add.1 Page 5

Copenhagen Accord

The Heads of State, Heads of Government, Ministers, and other heads of the following delegations present at the United Nations Climate Change Conference 2009 in Copenhagen:1 Albania, Algeria, Armenia, Australia, Austria, Bahamas, Bangladesh, Belarus, Belgium, Benin, Bhutan, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Burkina Faso, Cambodia, Canada, Central African Republic, Chile, China, Colombia, Congo, Costa Rica, Côte d’Ivoire, Croatia, Cyprus, Czech Republic, Democratic Republic of the Congo, Denmark, Djibouti, Eritrea, Estonia, Ethiopia, European Union, Fiji, Finland, France, Gabon, Georgia, Germany, Ghana, Greece, Guatemala, Guinea, Guyana, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kiribati, Lao People’s Democratic Republic, Latvia, Lesotho, Liechtenstein, Lithuania, Luxembourg, Madagascar, Malawi, Maldives, Mali, Malta, Marshall Islands, Mauritania, Mexico, Monaco, Mongolia, Montenegro, Morocco, Namibia, Nepal, Netherlands, New Zealand, Norway, Palau, Panama, Papua New Guinea, Peru, Poland, Portugal, Republic of Korea, Republic of Moldova, Romania, Russian Federation, Rwanda, Samoa, San Marino, Senegal, Serbia, Sierra Leone, Singapore, Slovakia, Slovenia, South Africa, Spain, Swaziland, Sweden, Switzerland, the former Yugoslav Republic of Macedonia, Tonga, Trinidad and Tobago, Tunisia, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, United Republic of Tanzania, United States of America, Uruguay and Zambia,

In pursuit of the ultimate objective of the Convention as stated in its Article 2,

Being guided by the principles and provisions of the Convention,

Noting the results of work done by the two Ad hoc Working Groups,

Endorsing decision 1/CP.15 on the Ad hoc Working Group on Long-term Cooperative Action and decision 1/CMP.5 that requests the Ad hoc Working Group on Further Commitments of Annex I Parties under the Kyoto Protocol to continue its work,

Have agreed on this Copenhagen Accord which is operational immediately.

1. We underline that climate change is one of the greatest challenges of our time. We emphasise our strong political will to urgently combat climate change in accordance with the principle of common but differentiated responsibilities and respective capabilities. To achieve the ultimate objective of the Convention to stabilize greenhouse gas concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system, we shall, recognizing the scientific view that the increase in global temperature should be below 2 degrees Celsius, on the basis of equity and in the context of sustainable development, enhance our long-term cooperative action to combat climate change. We recognize the critical impacts of climate change and the potential impacts of response measures on countries particularly vulnerable to its adverse effects and stress the need to establish a comprehensive adaptation programme including international support.

2. We agree that deep cuts in global emissions are required according to science, and as documented by the IPCC Fourth Assessment Report with a view to reduce global emissions so as to hold the increase in global temperature below 2 degrees Celsius, and take action to meet this objective consistent with science and on the basis of equity. We should cooperate in achieving the peaking of global and national emissions as soon as possible, recognizing that the time frame for peaking will be longer in developing countries and bearing in mind that social and economic development and poverty

1 Some Parties listed above stated in their communications to the secretariat specific understandings on the nature

of the Accord and related matters, based on which they have agreed to be listed here. The full text of the letters received from Parties in relation to the Copenhagen Accord, including the specific understandings, can be found at <http://unfccc.int/meetings/items/5276.php>.

ATTACHMENTS P 2

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FCCC/CP/2009/11/Add.1 Page 6 eradication are the first and overriding priorities of developing countries and that a low-emission development strategy is indispensable to sustainable development.

3. Adaptation to the adverse effects of climate change and the potential impacts of response measures is a challenge faced by all countries. Enhanced action and international cooperation on adaptation is urgently required to ensure the implementation of the Convention by enabling and supporting the implementation of adaptation actions aimed at reducing vulnerability and building resilience in developing countries, especially in those that are particularly vulnerable, especially least developed countries, small island developing States and Africa. We agree that developed countries shall provide adequate, predictable and sustainable financial resources, technology and capacity-building to support the implementation of adaptation action in developing countries.

4. Annex I Parties commit to implement individually or jointly the quantified economy-wide emissions targets for 2020, to be submitted in the format given in Appendix I by Annex I Parties to the secretariat by 31 January 2010 for compilation in an INF document. Annex I Parties that are Party to the Kyoto Protocol will thereby further strengthen the emissions reductions initiated by the Kyoto Protocol. Delivery of reductions and financing by developed countries will be measured, reported and verified in accordance with existing and any further guidelines adopted by the Conference of the Parties, and will ensure that accounting of such targets and finance is rigorous, robust and transparent.

5. Non-Annex I Parties to the Convention will implement mitigation actions, including those to be submitted to the secretariat by non-Annex I Parties in the format given in Appendix II by 31 January 2010, for compilation in an INF document, consistent with Article 4.1 and Article 4.7 and in the context of sustainable development. Least developed countries and small island developing States may undertake actions voluntarily and on the basis of support. Mitigation actions subsequently taken and envisaged by Non-Annex I Parties, including national inventory reports, shall be communicated through national communications consistent with Article 12.1(b) every two years on the basis of guidelines to be adopted by the Conference of the Parties. Those mitigation actions in national communications or otherwise communicated to the Secretariat will be added to the list in appendix II. Mitigation actions taken by Non-Annex I Parties will be subject to their domestic measurement, reporting and verification the result of which will be reported through their national communications every two years. Non-Annex I Parties will communicate information on the implementation of their actions through National Communications, with provisions for international consultations and analysis under clearly defined guidelines that will ensure that national sovereignty is respected. Nationally appropriate mitigation actions seeking international support will be recorded in a registry along with relevant technology, finance and capacity building support. Those actions supported will be added to the list in appendix II. These supported nationally appropriate mitigation actions will be subject to international measurement, reporting and verification in accordance with guidelines adopted by the Conference of the Parties.

6. We recognize the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests and agree on the need to provide positive incentives to such actions through the immediate establishment of a mechanism including REDD-plus, to enable the mobilization of financial resources from developed countries.

7. We decide to pursue various approaches, including opportunities to use markets, to enhance the cost-effectiveness of, and to promote mitigation actions. Developing countries, especially those with low emitting economies should be provided incentives to continue to develop on a low emission pathway.

8. Scaled up, new and additional, predictable and adequate funding as well as improved access shall be provided to developing countries, in accordance with the relevant provisions of the Convention, to enable and support enhanced action on mitigation, including substantial finance to reduce emissions from deforestation and forest degradation (REDD-plus), adaptation, technology development

ATTACHMENTS P 3

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FCCC/CP/2009/11/Add.1 Page 7

and transfer and capacity-building, for enhanced implementation of the Convention. The collective commitment by developed countries is to provide new and additional resources, including forestry and investments through international institutions, approaching USD 30 billion for the period 2010–2012 with balanced allocation between adaptation and mitigation. Funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa. In the context of meaningful mitigation actions and transparency on implementation, developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. New multilateral funding for adaptation will be delivered through effective and efficient fund arrangements, with a governance structure providing for equal representation of developed and developing countries. A significant portion of such funding should flow through the Copenhagen Green Climate Fund.

9. To this end, a High Level Panel will be established under the guidance of and accountable to the Conference of the Parties to study the contribution of the potential sources of revenue, including alternative sources of finance, towards meeting this goal.

10. We decide that the Copenhagen Green Climate Fund shall be established as an operating entity of the financial mechanism of the Convention to support projects, programme, policies and other activities in developing countries related to mitigation including REDD-plus, adaptation, capacity-building, technology development and transfer.

11. In order to enhance action on development and transfer of technology we decide to establish a Technology Mechanism to accelerate technology development and transfer in support of action on adaptation and mitigation that will be guided by a country-driven approach and be based on national circumstances and priorities.

12. We call for an assessment of the implementation of this Accord to be completed by 2015, including in light of the Convention’s ultimate objective. This would include consideration of strengthening the long-term goal referencing various matters presented by the science, including in relation to temperature rises of 1.5 degrees Celsius.

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2000 2020 2040 2060 2080 2100 2120 21400

500

1000

1500

SLR

(mm

)

Year

The uncertainty is now When rather than How much

Will Sea Level rise by 0.9 m in 60 years or in 140 years?

For planning purposes a precautionary approach considers the higher side of the range for what can happen. And the commitment to long term responses in the ocean and cryosphere mean that sea level will continue to rise for several centuries after global temperatures are stabilised.

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A rise in the water table increases flood risk

The Australian planning standards for sea level rise are linked to research on the coastal impacts that have been carried out by their Antarctic Climate & Ecosystems Cooperative Research Centre and which notes that, for some coastal areas: "As a rule of thumb, a 0.1 m rise in sea level increases the frequency of flooding by about a factor of three. This effect is multiplicative so that even a relatively modest increase in mean sea level of 0.5 m will increase the frequency of flooding by a factor of roughly 300. This means that an event which presently only happens on average once every 100 years (the ‘100-year return event’) will happen several times a year after sea level has risen by 0.5 m." Hunter, J., I. Allison, and T. Jakszewicz, ACE CRC Report Card: Sea-Level Rise 2012, pp. 24, Antarctic Climate & Ecosystems CRC, 2012. http://www.acecrc.org.au/access/repository/resource/1c91bb6a-15f5-1030-998b-40404adc5e91/ACE%20SLR%20REPORT%20CARD.pdf

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November 2012

Too late for two degrees?Low carbon economy index 2012

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PwC | Too late for two degrees? 1

Foreword

It’s time to plan for a warmer world. The annual Low Carbon Economy Index centres on one core statistic: the rate of change of global carbon intensity. This year we estimated that the required improvement in global carbon intensity to meet a 2°C warming target has risen to 5.1% a year, from now to 2050. We have passed a critical threshold – not once since World War 2 has the world achieved that rate of decarbonisation, but the task now confronting us is to achieve it for 39 consecutive years.

The 2011 rate of improvement in carbon intensity was 0.7%, giving an average rate of decarbonisation of 0.8% a year since 2000. If the world continues to decarbonise at the rate since the turn of the millenium, there will be an emissions gap of approximately 12 GtCO2 by 2020, 30GtCO2 by 2030 and nearly 70GtCO2 by 2050, as compared to our 2-degree scenario.

Even doubling our current rate of decarbonisation, would still lead to emissions consistent with 6 degrees of warming by the end of the century. To give ourselves a more than 50% chance of avoiding 2 degrees will require a six-fold improvement in our rate of decarbonisation.

In the emerging markets, where the E7 are now emitting more than the G7, improvements in carbon intensity have largely stalled, with strong GDP growth closely coupled with rapid emissions growth. Meanwhile the policy context for carbon capture and storage (CCS) and nuclear, critical technologies for low carbon energy generation, remains uncertain. Government support for renewable energy technologies is also being scaled back. As negotiators convene every year to attempt to agree a global deal, carbon emissions continue to rise in most parts of the world.

Business leaders have been asking for clarity in political ambition on climate change. Now one thing is clear: businesses, governments and communities across the world need to plan for a warming world – not just 2°C, but 4°C, or even 6°C.

Leo Johnson

Partner, Sustainability and Climate Change, PwC

PwC refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

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2 Too late for two degrees? | PwC

Too late for two degrees?

Stabilising atmospheric carbon dioxide concentrations at 450 ppm, according to broad scientific consensus, will give the world a 50% probability of limiting warming to 2°C above pre-industrial levels. The 2°C target was formally agreed at COP-15 at Copenhagen 2009. Governments have since agreed to launch a review in 2013 to consider strengthening the long-term goal to 1.5°C.

We published the first Low Carbon Economy Index (LCEI) ahead of COP-15, to look at the progress of the G20 economies against a global carbon budget1 necessary to stabilise atmospheric carbon dioxide concentrations at 450 ppm. We estimated a low carbon pathway for the 21st century for the global economy, which required the world to decarbonise at 3.7% a year to 2050.

This is the fourth edition of our Low Carbon Economy Index, and a stock-take of progress since the Copenhagen summit. The failure of the global economy to reduce carbon intensity beyond business-as-usual levels has magnified the low carbon challenge.

1 See appendix for an explanation of how the carbon budget is derived.

Since 2000, the rate of decarbonisation has averaged 0.8% globally, a fraction of the required reduction. From 2010 to 2011, global carbon intensity continued this trend, falling by just 0.7%. Because of this slow start, global carbon intensity now needs to be cut by an average of 5.1% a year from now to 2050.

The PwC Low Carbon Economy Index evaluates the rate of decarbonisation of the global economy that is needed to limit warming to 2°C. This is based on a carbon budget that would stabilise atmospheric carbon dioxide concentrations at 450 ppm and give a 50% probability of limiting warming to 2°C.

This report shows that global carbon intensity decreased between 2000 and 2011 by around 0.8% a year. In 2011, carbon intensity decreased by just 0.7%.

The global economy now needs to cut carbon intensity by 5.1% every year from now to 2050 to achieve this carbon budget. This required rate of decarbonisation has not been seen even in a single year since the mid-20th century when these records began. Keeping to the 2°C carbon budget will require unprecedented and sustained reductions over four decades.

Governments’ ambitions to limit warming to 2°C appear highly unrealistic.

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PwC | Too late for two degrees? 3

Figure 1: PwC’s Low Carbon Economy Index* – Global

0

100

200

300

400

500

2000 2010 2020 2030 2040 2050

Car

bon

inte

nsity

(tC

O2/

$m (

2011

) G

DP

Pathway to a low-carbon economy (Actual for 2000-2011) Pathway to a low-carbon economy

1. PwC low carbon pathway for the 21st century: the world needed to decarbonise at 3.7%, on average, each year to 2050.

2. Progress 2000-2011: the global rate of decarbonisation averaged 0.8%.

3. Challenge to 2050: Global carbon intensity now needs to fall by 5.1% on average from now to 2050.

This rate of reduction has not been achieved in any of the past 50 years. Even if it might be achievable in the longer term, it is unrealistic to expect that decarbonisation could be stepped up immediately – which means that the reduction required in future years is likely to be far greater than 5.1%.

Governments’ ambitions to limit warning to 2°C now appear highly unrealistic. This new reality means that we must contemplate a much more challenging future. Whilst the negotiators continue to focus on 2°C, a growing number of scientists and other expert organisations are now projecting much more pessimistic scenarios for global temperatures. The International Energy Agency, for example, now considers 4°C and 6°C scenarios as well as 2°C in their latest analysis.

* We use the carbon intensity for countries as a measure of progress towards a low carbon economy. The carbon intensity of an economy is the emissions per unit of GDP and is affected by a country’s fuel mix, its energy efficiency and the composition of the economy (i.e. extent of activity in carbon-intensive sectors).

Source: PwC’s analysis, data from World Bank (2012) and BP Statistical Review (2012)

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4 Too late for two degrees? | PwC

Progress in 2011

The pace of reducing global carbon intensity has been slow, despite the growing international focus on climate change. The financial crisis, which started in 2008, has dampened progress even further – carbon intensity has fallen less than 1% in these four years. Continued slow progress in 2011 means that our estimate of the required annual rate of decarbonisation to 2050 has increased to 5.1%, from 4.8% in last year’s LCEI.

Total emissions from the E7 countries grew by 7.4% while those of the G7 economies fell by 2.0% in 20111. The E7 now emits more than the G7 countries, and further projected economic growth implies that emissions will continue the upward trend.

1 Countries in the E7 group of emerging economics are: Brazil Russia, India, China, Turkey, Indonesia and Mexico

Developed countriesIn the last year, major EU economies top our league table of countries with the highest rate of decarbonisation, with the UK, Germany and France all reducing carbon intensity by over 6% in 2010-2011. The irony is that a key reason for lower energy use was the milder winter in the region. Both UK and France also witnessed increased generation in low emissions nuclear power, whereas Germany’s exit from nuclear is reflected in its relatively lesser decline in emissions.

Emissions in the United States fell by 1.9% in 2011. A mild winter helped, but the shift from coal towards shale gas in its fuel mix and more efficient vehicles on the road signalled that decarbonisation may continue.

At the bottom of the league table for 2011 is Australia, a region where climate change is projected to cause more frequent and severe extreme weather. The result reflects an anomalous 2010 rather than a structural shift; since 2000, Australia averaged 1.7% reduction in carbon intensity, on a par with other developed countries. Carbon intensity grew significantly in 2011 (6.7%), reversing the decarbonisation seen in 2010 (of 10.9%). Heavy rainfall in Australia boosted hydro generation and also disrupted mining operations in Queensland and impacted on the level of coal stocks at power stations. A return to normality in 2011 saw Australia’s carbon intensity increase correspondingly, a large part of this due to the timing of the re-stocking of coal2.

2 Stocking and de-stocking of fossil fuels impacts the reported emissions data for some countries

Emerging economiesIn China and India, the reduction in carbon intensity seen in the last decade appears to have stalled. In both countries strong GDP growth was closely coupled with rapid emissions growth, despite commitments at Durban to significantly reduce carbon intensity by 2020 (40-45% for China and 20-25% for India respectively, relative to 2005 levels). Meanwhile Indonesia has managed to hold energy emissions broadly stable as its economy grew, with the resulting energy-related carbon intensity falling by 5.2% in 2011. Emissions from deforestation and land use change, which account for a large proportion of Indonesia’s emissions, grew significantly in the last few years (see Box 1).

Production vs. consumption dataIn line with the approach adopted by the UNFCCC3, the LCEI measures the source of carbon emissions, i.e. where emissions are produced, rather than ‘consumed’. But it is important to remember that it is consumption that drives emissions and, indeed, many of the other sustainability challenges the world faces.

Many developed countries are increasingly outsourcing their manufacturing needs abroad, so on a consumption basis would report higher emissions. The emission levels of those emerging economies that provide a manufacturing base for the rest of the world would be adjusted downwards, if exports were fully accounted for.

3 United Nations Framework Convention on Climate Change

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PwC | Too late for two degrees? 5

Figure 2: PwC’s Low Carbon Economy Index – G20

Source: PwC’s analysis, data from World Bank (2012) and BP Statistical Review (2012)

Country Change in energy- related

emissions 2010-2011

Real GDP growth

(PPP)2010-2011

Carbon intensity

(tC02/ 2011$m)

2010-2011

Change in carbon intensity

2010-2011

Annual average change

in carbon intensity

2000-2011

Required annual

decarbonisation rate

2012-2050

World 3.0% 3.7% 395 -0.7% -0.8% -5.1%

France -6.1% 1.7% 153 -7.7% -2.4% -4.4%

UK -6.4% 0.7% 209 -7.0% -2.8% -5.2%

Germany -3.6% 3.0% 235 -6.4% -2.2% -5.2%

Indonesia 0.9% 6.5% 377 -5.2% -1.0% -4.9%

EU -3.6% 1.5% 213 -5.1% -2.3% -5.2%

USA -1.9% 1.7% 374 -3.5% -2.1% -5.2%

Italy -2.5% 0.4% 203 -2.9% -1.2% -4.3%

Mexico 1.7% 3.9% 244 -2.1% -0.2% -4.6%

South Africa 1.5% 3.1% 781 -1.6% -1.4% -5.6%

Russia 2.9% 4.3% 510 -1.4% -3.9% -6.0%

Brazil 1.7% 2.7% 197 -1.0% -0.7% -4.1%

Argentina 7.9% 8.9% 242 -0.9% -1.6% -5.0%

South Korea 2.9% 3.6% 464 -0.7% -1.0% -6.5%

Canada 2.0% 2.5% 416 -0.4% -1.4% -5.3%

Saudi Arabia 6.7% 6.8% 817 0.0% 1.9% -7.0%

India 6.9% 6.9% 377 0.0% -1.4% -4.4%

Turkey 8.6% 8.5% 244 0.1% -0.5% -5.0%

China 9.4% 9.1% 754 0.2% -1.4% -6.1%

Japan 0.1% -0.7% 281 0.8% -0.8% -4.8%

Spain 2.2% 0.7% 211 1.5% -1.9% -3.6%

Australia 8.7% 1.8% 415 6.7% -1.7% -5.3%

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6 Too late for two degrees? | PwC

The low carbon challenge Too much carbon, too little time

Source: PwC analysis, pledges based on countries’ announcement, data from BP Statistical Review

Figure 3: Major developed countries – pledges and the scale of challenge

In the period leading up to the Copenhagen UN summit on climate change in 2009, major economies came forward and pledged carbon reduction targets for 2020. Analyses of those pledges suggest that they are collectively insufficient to meet a 2°C target. Even more worryingly, with eight years to go, it is questionable whether several of these pledges can be met.

Our calculations show the scale of the challenge, from now to 2020, for some of the largest developed economies. In some respects the economic downturn may make these absolute pledges less challenging1; but at the same time economic pressures may make it much harder to finance the necessary transition towards a low carbon economy.

1 This is in contrast to the intensity pledges that some emerging economies have made.

Country Pledge for 2020 Progress at 2011 Outstanding commitment

Pledge Required fossil fuel

emissions in 2020 (MtCO2)

Progress against pledge

Actual fossil fuel

emissions in 2011

(MtCO2e)

Fall in emissions

required from 2011 (MtCO2e)

Emissions reduction is equivalent to ...

US 17% below 2005 levels

5,390 7% below 2005 levels

6,017 627 100% of coal power generation replaced by gas

EU-15 20% below 1990 levels

2,774 5.5% below 1990 levels

3,277 503 Removing all of UK's current emissions

Japan 25% below 1990 levels

873 12% below 1990 levels

1,307 435 Removing all industrial sector emissions

UK 34% below 1990 levels

391 18% below 1990 levels

511 101 All coal-fired power plants to shut down or use 100% biomass or be fitted with CCS.

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PwC | Too late for two degrees? 7

The challenge isn’t necessarily easier for emerging economies – pledges to reduce carbon intensity mean curbing emissions at the same time as promoting rapid economic growth (see Figure 4). China and India are expected to nearly double the size of their economies by the end of the decade, but emissions must level off soon for them to meet their targets. The majority of any new energy demand will have to be met from renewable energy

Country Pledge for 2020

Progress at 2011 Outstanding commitment

Progress against pledge

2011 total fossil fuel emissions (MtCO2e)

GDP change projected

2011-2020(%)

Emissions change

required 2011-2020

(%)

Annual decarbonisation

rate required (%)

China 40-45% below 2005 carbon intensity

17% below 2005 carbon

intensity

8,979 92% +12% -4.5%

India 20-25% below 2005 carbon intensity

3% below 2005 carbon

intensity

1,798 86% +31% -2.8%

Russia 15-25% below 1990 absolute emissions

5% below 1990

absolute emissions

1,675 38% -19% -5.8%

Brazil* 36-39% below BAU emissions

n/a 482 41% -25% -6.8%

* Brazil’s emissions reported here are fossil fuel emissions only and do not include emissions from deforestation, which is the biggest source of emissions for the country – business-as-usual emissions are not estimated. See also Box 1.

Source: PwC analysis and projection are of GDP growth, pledges based on countries’ announcement

Figure 4: BRIC countries – pledges and the scale of challenge

or nuclear and not fossil fuel generation (unless this can be fitted with CCS). Russia and Brazil expect slower economic growth, but their emissions pledges imply a more drastic cut in carbon intensity than either China or India.

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PwC | Too late for two degrees? 9

Increasing degrees of risk

We estimate that the world economy now needs to reduce its carbon intensity by 5.1% every year to 2050 to have a fair chance of limiting warming to 2°C above pre-industrial levels. Even to have a reasonable prospect of getting to a 4°C scenario would imply nearly quadrupling the current rate of decarbonisation.

The decarbonisation rate required for a 2°C world has not been achieved in a single year since World War 2. The closest the world came to that rate of decarbonisation was during the severe recessions of the late 1970s/early 1980s (4.9% in 1981) and the late 1990s (4.2% in 1999). The expected reduction in emissions resulting from the current economic slowdown has not materialised, partly because of sustained growth in emerging markets. The observed relationship between economic growth and CO2 emissions is also asymmetric – emissions tend to grow proportionally with economic growth, but fall by less than the rate of economic decline.

The only way to avoid the pessimistic scenarios will be radical transformations in the ways the global economy currently functions: rapid uptake of renewable energy, sharp falls in fossil fuel use or massive deployment of CCS, removal of industrial emissions and halting deforestation. This suggests a need for much more ambition and urgency on climate policy, at both the national and international level.

Either way, business-as-usual is not an option.

Regardless of the outcomes at the UN climate change summit in Doha this year, one thing is clear. Governments and businesses can no longer assume that a 2°C warming world is the default scenario. Any investment in long-term assets or infrastructure, particularly in coastal or low-lying regions, needs to address more pessimistic scenarios. Sectors dependent on food, water, energy or ecosystem services need to scrutinise the resilience and viability of their supply chains. More carbon intensive sectors need to anticipate more invasive regulation and the possibility of stranded assets. And governments’ support for vulnerable communities needs to consider more drastic actions.

Figure 5: Implied concentration levels at different rates of decarbonisation

Source: PwC analysis, IPCC AR4 WG1, Chapter 10, Table 10.8

Average annual rate of global decarbonisation to 2050 (%)

Implied concentration levels, approximate*

ppm CO2e

IPCC ‘best guess’ of average global temperature increase above pre-industrial levels, rounded to nearest oC

1.6% 1,200 ppm 6°C

3.0% 750 ppm 4°C

4.5% 550 ppm 3°C

5.1% 450 ppm 2°C

* Note: This high-level analysis has rounded figures and made several simplifying assumptions, for example on carbon sinks, and ignored complex interactions in the carbon cycle (such as any feedback effects), consistent with the LCEI model described in Appendix 1. In table 10.8, the IPCC also provides the likely range of temperature outcomes at different CO2 equivalent concentrations. The likely range of temperature increase is greater at higher concentrations.

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Why a 4°C Warmer World Must be Avoided

Turn Down Heatth

e

November 2012A Report for the World Bank by the Potsdam Institute for Climate Impact Research and Climate Analytics

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Executive SummaryThis report provides a snapshot of recent scientific literature and new analyses of likely impacts and risks that would be asso-ciated with a 4° Celsius warming within this century. It is a rigorous attempt to outline a range of risks, focusing on developing countries and especially the poor. A 4°C world would be one of unprecedented heat waves, severe drought, and major floods in many regions, with serious impacts on ecosystems and associated services. But with action, a 4°C world can be avoided and we can likely hold warming below 2°C.

Without further commitments and action to reduce greenhouse gas emissions, the world is likely to warm by more than 3°C above the preindustrial climate. Even with the current mitigation commitments and pledges fully implemented, there is roughly a 20 percent likelihood of exceeding 4°C by 2100. If they are not met, a warming of 4°C could occur as early as the 2060s. Such a warming level and associated sea-level rise of 0.5 to 1 meter, or more, by 2100 would not be the end point: a further warming to levels over 6°C, with several meters of sea-level rise, would likely occur over the following centuries.

Thus, while the global community has committed itself to holding warming below 2°C to prevent “dangerous” climate change, and Small Island Developing states (SIDS) and Least Developed Countries (LDCs) have identified global warming of 1.5°C as warming above which there would be serious threats to their own development and, in some cases, survival, the sum total of current policies—in place and pledged—will very likely lead to warming far in excess of these levels. Indeed, present emission trends put the world plausibly on a path toward 4°C warming within the century.

This report is not a comprehensive scientific assessment, as will be forthcoming from the Intergovernmental Panel on Climate Change (IPCC) in 2013–14 in its Fifth Assessment Report. It is focused on developing countries, while recognizing that developed countries are also vulnerable and at serious risk of major damages from climate change. A series of recent extreme events worldwide continue to highlight the vulnerability of not only the developing world but even wealthy industrialized countries.

Uncertainties remain in projecting the extent of both climate change and its impacts. We take a risk-based approach in which risk is defined as impact multiplied by probability: an event with low probability can still pose a high risk if it implies serious consequences.

No nation will be immune to the impacts of climate change. However, the distribution of impacts is likely to be inherently unequal and tilted against many of the world’s poorest regions, which have the least economic, institutional, scientific, and tech-nical capacity to cope and adapt. For example:

• Even though absolute warming will be largest in high latitudes, the warming that will occur in the tropics is larger when com-pared to the historical range of temperature and extremes to which human and natural ecosystems have adapted and coped. The projected emergence of unprecedented high-temperature extremes in the tropics will consequently lead to significantly larger impacts on agriculture and ecosystems.

• Sea-level rise is likely to be 15 to 20 percent larger in the trop-ics than the global mean.

• Increases in tropical cyclone intensity are likely to be felt disproportionately in low-latitude regions.

• Increasing aridity and drought are likely to increase substan-tially in many developing country regions located in tropical and subtropical areas.

A world in which warming reaches 4°C above preindustrial levels (hereafter referred to as a 4°C world), would be one of

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tURn DoWn tHe HeAt: WHY A 4°C WARMeR WoRLD MUst Be AVoIDeD

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unprecedented heat waves, severe drought, and major floods in many regions, with serious impacts on human systems, ecosystems, and associated services.

Warming of 4°C can still be avoided: numerous studies show that there are technically and economically feasible emissions pathways to hold warming likely below 2°C. Thus the level of impacts that developing countries and the rest of the world expe-rience will be a result of government, private sector, and civil society decisions and choices, including, unfortunately, inaction.

Observed Impacts and Changes to the Climate SystemThe unequivocal effects of greenhouse gas emission–induced change on the climate system, reported by IPCC’s Fourth Assess-ment Report (AR4) in 2007, have continued to intensify, more or less unabated:

• The concentration of the main greenhouse gas, carbon diox-ide (CO2), has continued to increase from its preindustrial concentration of approximately 278 parts per million (ppm) to over 391 ppm in September 2012, with the rate of rise now at 1.8 ppm per year.

• The present CO2 concentration is higher than paleoclimatic and geologic evidence indicates has occurred at any time in the last 15 million years.

• Emissions of CO2 are, at present, about 35,000 million metric tons per year (including land-use change) and, absent further policies, are projected to rise to 41,000 million metric tons of CO2 per year in 2020.

• Global mean temperature has continued to increase and is now about 0.8°C above preindustrial levels.

A global warming of 0.8°C may not seem large, but many climate change impacts have already started to emerge, and the shift from 0.8°C to 2°C warming or beyond will pose even greater challenges. It is also useful to recall that a global mean temperature increase of 4°C approaches the difference between temperatures today and those of the last ice age, when much of central Europe and the northern United States were covered with kilometers of ice and global mean temperatures were about 4.5°C to 7°C lower. And this magnitude of climate change—human induced—is occurring over a century, not millennia.

The global oceans have continued to warm, with about 90 percent of the excess heat energy trapped by the increased green-house gas concentrations since 1955 stored in the oceans as heat. The average increase in sea levels around the world over the 20th century has been about 15 to 20 centimeters. Over the last decade the average rate of sea-level rise has increased to about 3.2 cm per

decade. Should this rate remain unchanged, this would mean over 30 cm of additional sea-level rise in the 21st century.

The warming of the atmosphere and oceans is leading to an accelerating loss of ice from the Greenland and Antarctic ice sheets, and this melting could add substantially to sea-level rise in the future. Overall, the rate of loss of ice has more than tripled since the 1993–2003 period as reported in the IPCC AR4, reaching 1.3 cm per decade over 2004–08; the 2009 loss rate is equivalent to about 1.7 cm per decade. If ice sheet loss continues at these rates, without acceleration, the increase in global average sea level due to this source would be about 15 cm by the end of the 21st century. A clear illustration of the Greenland ice sheet’s increasing vulner-ability to warming is the rapid growth in melt area observed since the 1970s. As for Arctic sea ice, it reached a record minimum in September 2012, halving the area of ice covering the Arctic Ocean in summers over the last 30 years.

The effects of global warming are also leading to observed changes in many other climate and environmental aspects of the Earth system. The last decade has seen an exceptional number of extreme heat waves around the world with consequential severe impacts. Human-induced climate change since the 1960s has increased the frequency and intensity of heat waves and thus also likely exacerbated their societal impacts. In some climatic regions, extreme precipitation and drought have increased in intensity and/or frequency with a likely human influence. An example of a recent extreme heat wave is the Russian heat wave of 2010, which had very significant adverse consequences. Preliminary estimates for the 2010 heat wave in Russia put the death toll at 55,000, annual crop failure at about 25 percent, burned areas at more than 1 million hectares, and economic losses at about US$15 billion (1 percent gross domestic product (GDP)).

In the absence of climate change, extreme heat waves in Europe, Russia, and the United States, for example, would be expected to occur only once every several hundred years. Observations indicate a tenfold increase in the surface area of the planet experiencing extreme heat since the 1950s.

The area of the Earth’s land surface affected by drought has also likely increased substantially over the last 50 years, somewhat faster than projected by climate models. The 2012 drought in the United States impacted about 80 percent of agricultural land, making it the most severe drought since the 1950s.

Negative effects of higher temperatures have been observed on agricultural production, with recent studies indicating that since the 1980s global maize and wheat production may have been reduced significantly compared to a case without climate change.

Effects of higher temperatures on the economic growth of poor countries have also been observed over recent decades, suggesting a significant risk of further reductions in the economic growth in poor countries in the future due to global warming. An MIT study1 used historical fluctuations in temperature within countries

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to identify its effects on aggregate economic outcomes. It reported that higher temperatures substantially reduce economic growth in poor countries and have wide-ranging effects, reducing agricultural output, industrial output, and political stability. These findings inform debates over the climate’s role in economic development and suggest the possibility of substantial negative impacts of higher temperatures on poor countries.

Projected Climate Change Impacts in a 4°C World

The effects of 4°C warming will not be evenly distributed around the world, nor would the consequences be simply an extension of those felt at 2°C warming. The largest warming will occur over land and range from 4°C to 10°C. Increases of 6°C or more in average monthly summer temperatures would be expected in large regions of the world, including the Mediterranean, North Africa, the Middle East, and the contiguous United States

Projections for a 4°C world show a dramatic increase in the intensity and frequency of high-temperature extremes. Recent extreme heat waves such as in Russia in 2010 are likely to become the new normal summer in a 4°C world. Tropical South America, central Africa, and all tropical islands in the Pacific are likely to regularly experience heat waves of unprecedented magnitude and duration. In this new high-temperature climate regime, the coolest months are likely to be substantially warmer than the warmest months at the end of the 20th century. In regions such as the Mediterranean, North Africa, the Middle East, and the Tibetan plateau, almost all summer months are likely to be warmer than the most extreme heat waves presently experienced. For example, the warmest July in the Mediterranean region could be 9°C warmer than today’s warmest July.

Extreme heat waves in recent years have had severe impacts, causing heat-related deaths, forest fires, and harvest losses. The impacts of the extreme heat waves projected for a 4°C world have not been evaluated, but they could be expected to vastly exceed the consequences experienced to date and potentially exceed the adaptive capacities of many societies and natural systems.

Rising CO2 Concentration and Ocean Acidification

Apart from a warming of the climate system, one of the most serious consequences of rising carbon dioxide concentration in the atmosphere occurs when it dissolves in the ocean and results in acidification. A substantial increase in ocean acidity has been observed since preindustrial times. A warming of 4°C or more by 2100 would correspond to a CO2 concentration above 800 ppm

and an increase of about 150 percent in acidity of the ocean. The observed and projected rates of change in ocean acidity over the next century appear to be unparalleled in Earth’s history. Evidence is already emerging of the adverse consequences of acidification for marine organisms and ecosystems, combined with the effects of warming, overfishing, and habitat destruction.

Coral reefs in particular are acutely sensitive to changes in water temperatures, ocean pH, and intensity and frequency of tropical cyclones. Reefs provide protection against coastal floods, storm surges, and wave damage as well as nursery grounds and habitat for many fish species. Coral reef growth may stop as CO

2

concentration approaches 450 ppm over the coming decades (cor-responding to a warming of about 1.4°C in the 2030s). By the time the concentration reaches around 550 ppm (corresponding to a warming of about 2.4°C in the 2060s), it is likely that coral reefs in many areas would start to dissolve. The combination of thermally induced bleaching events, ocean acidification, and sea-level rise threatens large fractions of coral reefs even at 1.5°C global warming. The regional extinction of entire coral reef eco-systems, which could occur well before 4°C is reached, would have profound consequences for their dependent species and for the people who depend on them for food, income, tourism, and shoreline protection.

Rising Sea Levels, Coastal Inundation and LossWarming of 4°C will likely lead to a sea-level rise of 0.5 to 1 meter, and possibly more, by 2100, with several meters more to be realized in the coming centuries. Limiting warming to 2°C would likely reduce sea-level rise by about 20 cm by 2100 compared to a 4°C world. However, even if global warming is limited to 2°C, global mean sea level could continue to rise, with some estimates ranging between 1.5 and 4 meters above present-day levels by the year 2300. Sea-level rise would likely be limited to below 2 meters only if warming were kept to well below 1.5°C.

Sea-level rise will vary regionally: for a number of geophysically determined reasons, it is projected to be up to 20 percent higher in the tropics and below average at higher latitudes. In particular, the melting of the ice sheets will reduce the gravitational pull on the ocean toward the ice sheets and, as a consequence, ocean water will tend to gravitate toward the Equator. Changes in wind and ocean currents due to global warming and other factors will also affect regional sea-level rise, as will patterns of ocean heat uptake and warming.

1 Dell, Melissa, Benjamin F. Jones, and Benjamin A. Olken. 2012. “Temperature Shocks and Economic Growth: Evidence from the Last Half Century.” American Economic Journal: Macroeconomics, 4(3): 66–95.

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Sea-level rise impacts are projected to be asymmetrical even within regions and countries. Of the impacts projected for 31 developing countries, only 10 cities account for two-thirds of the total exposure to extreme floods. Highly vulnerable cities are to be found in Mozambique, Madagascar, Mexico, Venezuela, India, Bangladesh, Indonesia, the Philippines, and Vietnam.

For small island states and river delta regions, rising sea levels are likely to have far ranging adverse consequences, especially when combined with the projected increased intensity of tropical cyclones in many tropical regions, other extreme weather events, and climate change–induced effects on oceanic ecosystems (for example, loss of protective reefs due to temperature increases and ocean acidification).

Risks to Human Support Systems: Food, Water, Ecosystems, and Human HealthAlthough impact projections for a 4°C world are still preliminary and it is often difficult to make comparisons across individual assessments, this report identifies a number of extremely severe risks for vital human support systems. With extremes of tempera-ture, heat waves, rainfall, and drought are projected to increase with warming; risks will be much higher in a 4°C world compared to a 2°C world.

In a world rapidly warming toward 4°C, the most adverse impacts on water availability are likely to occur in association with growing water demand as the world population increases. Some estimates indicate that a 4°C warming would significantly exacerbate existing water scarcity in many regions, particularly northern and eastern Africa, the Middle East, and South Asia, while additional countries in Africa would be newly confronted with water scarcity on a national scale due to population growth.

• Drier conditions are projected for southern Europe, Africa (except some areas in the northeast), large parts of North America and South America, and southern Australia, among others.

• Wetter conditions are projected in particular for the northern high latitudes—that is, northern North America, northern Europe, and Siberia—and in some monsoon regions. Some regions may experience reduced water stress compared to a case without climate change.

• Subseasonal and subregional changes to the hydrological cycle are associated with severe risks, such as flooding and drought, which may increase significantly even if annual averages change little.

With extremes of rainfall and drought projected to increase with warming, these risks are expected to be much higher in a 4°C world as compared to the 2°C world. In a 2°C world:

• River basins dominated by a monsoon regime, such as the Ganges and Nile, are particularly vulnerable to changes in the seasonality of runoff, which may have large and adverse effects on water availability.

• Mean annual runoff is projected to decrease by 20 to 40 percent in the Danube, Mississippi, Amazon, and Murray Darling river basins, but increase by roughly 20 percent in both the Nile and the Ganges basins.

All these changes approximately double in magnitude in a 4°C world.

The risk for disruptions to ecosystems as a result of ecosystem shifts, wildfires, ecosystem transformation, and forest dieback would be significantly higher for 4°C warming as compared to reduced amounts. Increasing vulnerability to heat and drought stress will likely lead to increased mortality and species extinction.

Ecosystems will be affected by more frequent extreme weather events, such as forest loss due to droughts and wildfire exacerbated by land use and agricultural expansion. In Amazonia, forest fires could as much as double by 2050 with warming of approximately 1.5°C to 2°C above preindustrial levels. Changes would be expected to be even more severe in a 4°C world.

In fact, in a 4°C world climate change seems likely to become the dominant driver of ecosystem shifts, surpassing habitat destruction as the greatest threat to biodiversity. Recent research suggests that large-scale loss of biodiversity is likely to occur in a 4°C world, with climate change and high CO

2 concentration driv-ing a transition of the Earth´s ecosystems into a state unknown in human experience. Ecosystem damage would be expected to dramatically reduce the provision of ecosystem services on which society depends (for example, fisheries and protection of coast-line—afforded by coral reefs and mangroves).

Maintaining adequate food and agricultural output in the face of increasing population and rising levels of income will be a challenge irrespective of human-induced climate change. The IPCC AR4 projected that global food production would increase for local average temperature rise in the range of 1°C to 3°C, but may decrease beyond these temperatures.

New results published since 2007, however, are much less opti-mistic. These results suggest instead a rapidly rising risk of crop yield reductions as the world warms. Large negative effects have been observed at high and extreme temperatures in several regions including India, Africa, the United States, and Australia. For example, significant nonlinear effects have been observed in the United States for local daily temperatures increasing to 29°C for corn and 30°C for soybeans. These new results and observations indicate a significant risk of high-temperature thresholds being crossed that could substantially undermine food security globally in a 4°C world.

Compounding these risks is the adverse effect of projected sea-level rise on agriculture in important low-lying delta areas, such

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as in Bangladesh, Egypt, Vietnam, and parts of the African coast. Sea-level rise would likely impact many mid-latitude coastal areas and increase seawater penetration into coastal aquifers used for irrigation of coastal plains. Further risks are posed by the likeli-hood of increased drought in mid-latitude regions and increased flooding at higher latitudes.

The projected increase in intensity of extreme events in the future would likely have adverse implications for efforts to reduce poverty, particularly in developing countries. Recent projections suggest that the poor are especially sensitive to increases in drought intensity in a 4°C world, especially across Africa, South Asia, and other regions.

Large-scale extreme events, such as major floods that interfere with food production, could also induce nutritional deficits and the increased incidence of epidemic diseases. Flooding can intro-duce contaminants and diseases into healthy water supplies and increase the incidence of diarrheal and respiratory illnesses. The effects of climate change on agricultural production may exacerbate under-nutrition and malnutrition in many regions—already major contributors to child mortality in developing countries. Whilst eco-nomic growth is projected to significantly reduce childhood stunt-ing, climate change is projected to reverse these gains in a number of regions: substantial increases in stunting due to malnutrition are projected to occur with warming of 2°C to 2.5°C, especially in Sub-Saharan Africa and South Asia, and this is likely to get worse at 4°C. Despite significant efforts to improve health services (for example, improved medical care, vaccination development, surveillance programs), significant additional impacts on poverty levels and human health are expected. Changes in temperature, precipitation rates, and humidity influence vector-borne diseases (for example, malaria and dengue fever) as well as hantaviruses, leishmaniasis, Lyme disease, and schistosomiasis.

Further health impacts of climate change could include injuries and deaths due to extreme weather events. Heat-amplified levels of smog could exacerbate respiratory disorders and heart and blood vessel diseases, while in some regions climate change–induced increases in concentrations of aeroallergens (pollens, spores) could amplify rates of allergic respiratory disorders.

Risks of Disruptions and Displacements in a 4°C World

Climate change will not occur in a vacuum. Economic growth and population increases over the 21st century will likely add to human welfare and increase adaptive capacity in many, if not most, regions. At the same time, however, there will also be increasing stresses and demands on a planetary ecosystem already approaching critical limits and boundaries. The resil-ience of many natural and managed ecosystems is likely to be

undermined by these pressures and the projected consequences of climate change.

The projected impacts on water availability, ecosystems, agri-culture, and human health could lead to large-scale displacement of populations and have adverse consequences for human security and economic and trade systems. The full scope of damages in a 4°C world has not been assessed to date.

Large-scale and disruptive changes in the Earth system are generally not included in modeling exercises, and rarely in impact assessments. As global warming approaches and exceeds 2°C, the risk of crossing thresholds of nonlinear tipping elements in the Earth system, with abrupt climate change impacts and unprec-edented high-temperature climate regimes, increases. Examples include the disintegration of the West Antarctic ice sheet leading to more rapid sea-level rise than projected in this analysis or large-scale Amazon dieback drastically affecting ecosystems, riv-ers, agriculture, energy production, and livelihoods in an almost continental scale region and potentially adding substantially to 21st-century global warming.

There might also be nonlinear responses within particular economic sectors to high levels of global warming. For example, nonlinear temperature effects on crops are likely to be extremely relevant as the world warms to 2°C and above. However, most of our current crop models do not yet fully account for this effect, or for the potential increased ranges of variability (for example, extreme temperatures, new invading pests and diseases, abrupt shifts in critical climate factors that have large impacts on yields and/or quality of grains).

Projections of damage costs for climate change impacts typically assess the costs of local damages, including infrastructure, and do not provide an adequate consideration of cascade effects (for example, value-added chains and supply networks) at national and regional scales. However, in an increasingly globalized world that experi-ences further specialization in production systems, and thus higher dependency on infrastructure to deliver produced goods, damages to infrastructure systems can lead to substantial indirect impacts. Seaports are an example of an initial point where a breakdown or substantial disruption in infrastructure facilities could trigger impacts that reach far beyond the particular location of the loss.

The cumulative and interacting effects of such wide-ranging impacts, many of which are likely to be felt well before 4°C warm-ing, are not well understood. For instance, there has not been a study published in the scientific literature on the full ecological, human, and economic consequences of a collapse of coral reef ecosystems, much less when combined with the likely concomitant loss of marine production due to rising ocean temperatures and increasing acidification, and the large-scale impacts on human settlements and infrastructure in low-lying fringe coastal zones that would result from sea-level rise of a meter or more this cen-tury and beyond.

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As the scale and number of impacts grow with increasing global mean temperature, interactions between them might increasingly occur, compounding overall impact. For example, a large shock to agricultural production due to extreme temperatures across many regions, along with substantial pressure on water resources and changes in the hydrological cycle, would likely impact both human health and livelihoods. This could, in turn, cascade into effects on economic development by reducing a population´s work capacity, which would then hinder growth in GDP.

With pressures increasing as warming progresses toward 4°C and combining with nonclimate–related social, economic, and population stresses, the risk of crossing critical social system thresholds will grow. At such thresholds existing institutions that would have supported adaptation actions would likely become much less effective or even collapse. One example is a risk that sea-level rise in atoll countries exceeds the capabilities of

controlled, adaptive migration, resulting in the need for complete abandonment of an island or region. Similarly, stresses on human health, such as heat waves, malnutrition, and decreasing quality of drinking water due to seawater intrusion, have the potential to overburden health-care systems to a point where adaptation is no longer possible, and dislocation is forced.

Thus, given that uncertainty remains about the full nature and scale of impacts, there is also no certainty that adaptation to a 4°C world is possible. A 4°C world is likely to be one in which communities, cities and countries would experience severe disrup-tions, damage, and dislocation, with many of these risks spread unequally. It is likely that the poor will suffer most and the global community could become more fractured, and unequal than today. The projected 4°C warming simply must not be allowed to occur—the heat must be turned down. Only early, cooperative, international actions can make that happen.

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STERN REVIEW: The Economics of Climate Change

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Executive Summary The scientific evidence is now overwhelming: climate change presents very serious global risks, and it demands an urgent global response. This independent Review was commissioned by the Chancellor of the Exchequer, reporting to both the Chancellor and to the Prime Minister, as a contribution to assessing the evidence and building understanding of the economics of climate change. The Review first examines the evidence on the economic impacts of climate change itself, and explores the economics of stabilising greenhouse gases in the atmosphere. The second half of the Review considers the complex policy challenges involved in managing the transition to a low-carbon economy and in ensuring that societies can adapt to the consequences of climate change that can no longer be avoided. The Review takes an international perspective. Climate change is global in its causes and consequences, and international collective action will be critical in driving an effective, efficient and equitable response on the scale required. This response will require deeper international co-operation in many areas - most notably in creating price signals and markets for carbon, spurring technology research, development and deployment, and promoting adaptation, particularly for developing countries. Climate change presents a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen. The economic analysis must therefore be global, deal with long time horizons, have the economics of risk and uncertainty at centre stage, and examine the possibility of major, non-marginal change. To meet these requirements, the Review draws on ideas and techniques from most of the important areas of economics, including many recent advances. The benefits of strong, early action on climate change outweigh the costs The effects of our actions now on future changes in the climate have long lead times. What we do now can have only a limited effect on the climate over the next 40 or 50 years. On the other hand what we do in the next 10 or 20 years can have a profound effect on the climate in the second half of this century and in the next. No-one can predict the consequences of climate change with complete certainty; but we now know enough to understand the risks. Mitigation - taking strong action to reduce emissions - must be viewed as an investment, a cost incurred now and in the coming few decades to avoid the risks of very severe consequences in the future. If these investments are made wisely, the costs will be manageable, and there will be a wide range of opportunities for growth and development along the way. For this to work well, policy must promote sound market signals, overcome market failures and have equity and risk mitigation at its core. That essentially is the conceptual framework of this Review. The Review considers the economic costs of the impacts of climate change, and the costs and benefits of action to reduce the emissions of greenhouse gases (GHGs) that cause it, in three different ways:

• Using disaggregated techniques, in other words considering the physical impacts of climate change on the economy, on human life and on the

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STERN REVIEW: The Economics of Climate Change

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environment, and examining the resource costs of different technologies and strategies to reduce greenhouse gas emissions;

• Using economic models, including integrated assessment models that

estimate the economic impacts of climate change, and macro-economic models that represent the costs and effects of the transition to low-carbon energy systems for the economy as a whole;

• Using comparisons of the current level and future trajectories of the ‘social

cost of carbon’ (the cost of impacts associated with an additional unit of greenhouse gas emissions) with the marginal abatement cost (the costs associated with incremental reductions in units of emissions).

From all of these perspectives, the evidence gathered by the Review leads to a simple conclusion: the benefits of strong, early action considerably outweigh the costs. The evidence shows that ignoring climate change will eventually damage economic growth. Our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse these changes. Tackling climate change is the pro-growth strategy for the longer term, and it can be done in a way that does not cap the aspirations for growth of rich or poor countries. The earlier effective action is taken, the less costly it will be. At the same time, given that climate change is happening, measures to help people adapt to it are essential. And the less mitigation we do now, the greater the difficulty of continuing to adapt in future.

***

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shocks have sparked violent conflict in the past, and conflict is a serious risk in areas such as West Africa, the Nile Basin and Central Asia. Climate change may initially have small positive effects for a few developed countries, but is likely to be very damaging for the much higher temperature increases expected by mid- to late-century under BAU scenarios.

In higher latitude regions, such as Canada, Russia and Scandinavia, climate change may lead to net benefits for temperature increases of 2 or 3°C, through higher agricultural yields, lower winter mortality, lower heating requirements, and a possible boost to tourism. But these regions will also experience the most rapid rates of warming, damaging infrastructure, human health, local livelihoods and biodiversity.

Developed countries in lower latitudes will be more vulnerable - for example, water availability and crop yields in southern Europe are expected to decline by 20% with a 2°C increase in global temperatures. Regions where water is already scarce will face serious difficulties and growing costs. The increased costs of damage from extreme weather (storms, hurricanes, typhoons, floods, droughts, and heat waves) counteract some early benefits of climate change and will increase rapidly at higher temperatures. Based on simple extrapolations, costs of extreme weather alone could reach 0.5 - 1% of world GDP per annum by the middle of the century, and will keep rising if the world continues to warm.

• A 5 or 10% increase in hurricane wind speed, linked to rising sea temperatures, is predicted approximately to double annual damage costs, in the USA.

• In the UK, annual flood losses alone could increase from 0.1% of GDP today

to 0.2 - 0.4% of GDP once the increase in global average temperatures reaches 3 or 4°C.

• Heat waves like that experienced in 2003 in Europe, when 35,000 people

died and agricultural losses reached $15 billion, will be commonplace by the middle of the century.

At higher temperatures, developed economies face a growing risk of large-scale shocks - for example, the rising costs of extreme weather events could affect global financial markets through higher and more volatile costs of insurance. Integrated assessment models provide a tool for estimating the total impact on the economy; our estimates suggest that this is likely to be higher than previously suggested. The second approach to examining the risks and costs of climate change adopted in the Review is to use integrated assessment models to provide aggregate monetary estimates. Formal modelling of the overall impact of climate change in monetary terms is a formidable challenge, and the limitations to modelling the world over two centuries or more demand great caution in interpreting results. However, as we have explained, the lags from action to effect are very long and the quantitative analysis needed to inform action will depend on such long-range modelling exercises. The monetary impacts of climate change are now expected to be more serious than many earlier studies suggested, not least because those studies tended to exclude some of the

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most uncertain but potentially most damaging impacts. Thanks to recent advances in the science, it is now possible to examine these risks more directly, using probabilities. Most formal modelling in the past has used as a starting point a scenario of 2-3°C warming. In this temperature range, the cost of climate change could be equivalent to a permanent loss of around 0-3% in global world output compared with what could have been achieved in a world without climate change. Developing countries will suffer even higher costs. However, those earlier models were too optimistic about warming: more recent evidence indicates that temperature changes resulting from BAU trends in emissions may exceed 2-3°C by the end of this century. This increases the likelihood of a wider range of impacts than previously considered. Many of these impacts, such as abrupt and large-scale climate change, are more difficult to quantify. With 5-6°C warming - which is a real possibility for the next century - existing models that include the risk of abrupt and large-scale climate change estimate an average 5-10% loss in global GDP, with poor countries suffering costs in excess of 10% of GDP. Further, there is some evidence of small but significant risks of temperature rises even above this range. Such temperature increases would take us into territory unknown to human experience and involve radical changes in the world around us. With such possibilities on the horizon, it was clear that the modelling framework used by this Review had to be built around the economics of risk. Averaging across possibilities conceals risks. The risks of outcomes much worse than expected are very real and they could be catastrophic. Policy on climate change is in large measure about reducing these risks. They cannot be fully eliminated, but they can be substantially reduced. Such a modelling framework has to take into account ethical judgements on the distribution of income and on how to treat future generations. The analysis should not focus only on narrow measures of income like GDP. The consequences of climate change for health and for the environment are likely to be severe. Overall comparison of different strategies will include evaluation of these consequences too. Again, difficult conceptual, ethical and measurement issues are involved, and the results have to be treated with due circumspection. The Review uses the results from one particular model, PAGE2002, to illustrate how the estimates derived from these integrated assessment models change in response to updated scientific evidence on the probabilities attached to degrees of temperature rise. The choice of model was guided by our desire to analyse risks explicitly - this is one of the very few models that would allow that exercise. Further, its underlying assumptions span the range of previous studies. We have used this model with one set of data consistent with the climate predictions of the 2001 report of the Intergovernmental Panel on Climate Change, and with one set that includes a small increase in the amplifying feedbacks in the climate system. This increase illustrates one area of the increased risks of climate change that have appeared in the peer-reviewed scientific literature published since 2001. We have also considered how the application of appropriate discount rates, assumptions about the equity weighting attached to the valuation of impacts in poor countries, and estimates of the impacts on mortality and the environment would increase the estimated economic costs of climate change.

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Using this model, and including those elements of the analysis that can be incorporated at the moment, we estimate the total cost over the next two centuries of climate change associated under BAU emissions involves impacts and risks that are equivalent to an average reduction in global per-capita consumption of at least 5%, now and forever. While this cost estimate is already strikingly high, it also leaves out much that is important. The cost of BAU would increase still further, were the model systematically to take account of three important factors:

• First, including direct impacts on the environment and human health (sometimes called ‘non-market’ impacts) increases our estimate of the total cost of climate change on this path from 5% to 11% of global per-capita consumption. There are difficult analytical and ethical issues of measurement here. The methods used in this model are fairly conservative in the value they assign to these impacts.

• Second, some recent scientific evidence indicates that the climate system

may be more responsive to greenhouse-gas emissions than previously thought, for example because of the existence of amplifying feedbacks such as the release of methane and weakening of carbon sinks. Our estimates, based on modelling a limited increase in this responsiveness, indicate that the potential scale of the climate response could increase the cost of climate change on the BAU path from 5% to 7% of global consumption, or from 11% to 14% if the non-market impacts described above are included.

• Third, a disproportionate share of the climate-change burden falls on poor

regions of the world. If we weight this unequal burden appropriately, the estimated global cost of climate change at 5-6°C warming could be more than one-quarter higher than without such weights.

Putting these additional factors together would increase the total cost of BAU climate change to the equivalent of around a 20% reduction in consumption per head, now and into the future. In summary, analyses that take into account the full ranges of both impacts and possible outcomes - that is, that employ the basic economics of risk - suggest that BAU climate change will reduce welfare by an amount equivalent to a reduction in consumption per head of between 5 and 20%. Taking account of the increasing scientific evidence of greater risks, of aversion to the possibilities of catastrophe, and of a broader approach to the consequences than implied by narrow output measures, the appropriate estimate is likely to be in the upper part of this range. Economic forecasting over just a few years is a difficult and imprecise task. The analysis of climate change requires, by its nature, that we look out over 50, 100, 200 years and more. Any such modelling requires caution and humility, and the results are specific to the model and its assumptions. They should not be endowed with a precision and certainty that is simply impossible to achieve. Further, some of the big uncertainties in the science and the economics concern the areas we know least about (for example, the impacts of very high temperatures), and for good reason - this is unknown territory. The main message from these models is that when we try to take due account of the upside risks and uncertainties, the probability-weighted costs look very large. Much (but not all) of the risk can be reduced through a strong mitigation policy, and we argue that this can be achieved at a far lower cost than

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Climate Vulnerable Forum

CLIMATE VULNERABILITY MONITOR A GUIDE TO THE COLD CALCULUS OF A HOT PLANET2

NDEDITION

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16 I EXECUTIVE SUMMARY

This report provides a reassessment of the human

and economic costs of the climate crisis. The

reassessment is based on a wealth of the latest

research and scientific work on climate change and

the carbon economy, research that is assimilated as

a part of this report.

THE MAIN FINDING OF THIS REPORT IS THAT

CLIMATE CHANGE HAS ALREADY HELD BACK

GLOBAL DEVELOPMENT: IT IS ALREADY A

SIGNIFICANT COST TO THE WORLD ECONOMY,

WHILE INACTION ON CLIMATE CHANGE CAN BE

CONSIDERED A LEADING GLOBAL CAUSE OF DEATH.

EXECUTIVE SUMMARY

CLIMATE – TOTAL COSTS

Developed Developing Country High Emitters

Developing Country Low Emitters Other Industrialized

20302010

38%

54%

W149%

36%

46%

6%

4%

12%

4%

20302010

CARBON – TOTAL COSTS

Developed Developing Country High Emitters

Developing Country Low Emitters Other Industrialized

18%

58%

W57%

21%

41%

6%

18%

32%

6%

CARBON – TOTAL DEATHS

Developed Developing Country High Emitters

Developing Country Low Emitters Other Industrialized

20102030

46% 45%

U1%

48%

43%

5%

5%

4%

4%

CLIMATE – TOTAL DEATHS

Developing Country High Emitters Developing Country Low Emitters

Other Industrialized

20302010

85%

14%

W35%

83%

15% 2%

1%

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EXECUTIVE SUMMARY I 17

This report estimates that climate change causes

400,000 deaths on average each year today, mainly

due to hunger and communicable diseases that

affect above all children in developing countries.

Our present carbon-intensive energy system and

related activities cause an estimated 4.5 million

deaths each year linked to air pollution, hazardous

occupations and cancer.

Climate change caused economic losses estimated

close to 1% of global GDP for the year 2010, or 700

billion dollars (2010 PPP). The carbon-intensive

economy cost the world another 0.7% of GDP in that

year, independent of any climate change losses.

Together, carbon economy- and climate change-

related losses amounted to over 1.2 trillion dollars

in 2010.

The world is already committed to a substantial

increase in global temperatures – at least another

0.5° C (1° F) due to a combination of the inertia of

the world’s oceans, the slow response of the carbon

cycle to reduced CO2 emission and limitations

on how fast emissions can actually be reduced.1

The world economy therefore faces an increase in

pressures that are estimated to lead to more than a

doubling in the costs of climate change by 2030 to

an estimated 2.5% of global GDP. Carbon economy

costs also increase over this same period so that

global GDP in 2030 is estimated to be well over

3% lower than it would have been in the absence of

climate change and harmful carbon-intensive energy

practices.

Continuing today’s patterns of carbon-intensive

energy use is estimated, together with climate

change, to cause 6 million deaths per year by 2030,

close to 700,000 of which would be due to climate

change. This implies that a combined climate-carbon

crisis is estimated to claim 100 million lives between

now and the end of the next decade. A significant

TECHNICAL SUMMARYThe Monitor presents a new and

original analysis, synthesizing

the latest research and scientific

information on the global impact

– including benefits and losses

– of climate change and the

carbon economy in economic,

environmental and health terms.

Climate change already causes

400,000 deaths each year on

average. The present carbon-

intensive economy moreover

is linked to 4.5 million deaths

worldwide each year. Climate

change to date and the present

carbon economy are estimated

to have already lowered

global output by 1.6% of world

GDP or by around 1.2 trillion

dollars (2010 PPP). Losses are

expected to increase rapidly,

reaching 6 million deaths and

3.2% of GDP in net average

global losses by 2030. If

emissions continue to increase

unabated in a business-as-usual

fashion (similar to the new

IPCC RCP8.5 scenario), yearly

average global losses to world

output could exceed 10% of

global GDP before the end of

the century, with damages

accelerating throughout the

century. The costs of climate

change and the carbon economy

are already significantly higher

than the estimated costs of

shifting the world economy to

a low-carbon footing – around

0.5% of GDP for the current

decade, although increasing for

subsequent decades.1

This report and scientific

literature imply adaptation costs

NUMBER OF DEATHS2010 2030

Climate

Diarrheal Infections 85,000 150,000

Heat & Cold Illnesses 35,000 35,000

Hunger 225,000 380,000

Malaria & Vector Borne Diseases 20,000 20,000

Meningitis 30,000 40,000

Environmental Disasters 5,000 7,000

Carbon

Air Pollution 1,400,000 2,100,000

Indoor Smoke 3,100,000 3,100,000

Occupational Hazards 55,000 80,000

Skin Cancer 20,000 45,000

World 4,975,000 5,957,000

OVERALL COSTSLosses 2010,

Bln PPP corrected USD

Losses 2010, % of GDP

Net Losses, % of GDP 2010

Net Losses, % of GDP 2030

Climate 696 0.9% 0.8% 2.1%

Carbon 542 0.7% 0.7% 1.2%

World 1,238 1.7% 1.6% 3.2%

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18 I EXECUTIVE SUMMARY

share of the global population would be directly

affected by inaction on climate change.

Global figures mask enormous costs that will, in

particular, hit developing countries and above all the

world’s poorest groups. Least Developed Countries

(LDCs) faced on average in excess of 7% of forgone

GDP in 2010 due to climate change and the carbon

economy, as all faced inequitable access to energy

and sustainable development.

Over 90% of mortality assessed in this report occurs

in developing countries only – more than 98% in the

case of climate change.

Of all these losses, it is the world’s poorest

communities within lower and middle-income

countries that are most exposed. Losses of income

among these groups is already extreme. The world’s

principal objectives for poverty reduction, the

Millennium Development Goals (MDGs), are therefore

under comprehensive pressures, in particular as a

result of climate change.

The impact for rural and coastal communities in

the lowest-income settings implies serious threats

for food security and extreme poverty (goal 1

of 8), child health and the ability of children to

attend school (goals 2 and 4), maternal health

and women’s development (goals 3 and 5), the

prevalence of infectious diseases (goal 6) and,

through water, fisheries and biodiversity impacts,

environmental sustainability (goal 7). Furthermore,

in a difficult fiscal environment, the advent of

climate change has pressured governments to divert

Official Development Assistance (ODA) funds from

other development commitments and activities in

an attempt to provide support for climate change

concerns, including to a marginal degree, for

helping vulnerable communities adapt to climate

change. The Green Climate Fund, agreed upon

in incrementally greater detail at the successive

international climate talks at Copenhagen, Cancún

and Durban, faces an economic environment of

declining ODA tied to acute fiscal crises across

a host of the world’s wealthiest economies (see:

climate finance). These developments have

ultimately compromised the global partnership

for development (goal 8). Lag areas towards MDG

achievement also align very closely with the most

pronounced vulnerabilities resulting from climate

change: sub-Saharan Africa, small island developing

states, and South Asia in particular.

Poverty reduction efforts are in peril as the potential

temperature increase the world is already committed

to has only begun to be realized, and the world’s

major economies are in no way spared. The United

States, China and India in particular are expected

to incur enormous losses that in 2030 for these

three countries alone will collectively total 2.5 trillion

dollars in economic costs and over 3 million deaths

per year, or half of all mortality – the majority in India

and China.

The whole world is affected by these comprehensive

concerns: 250 million people face the pressures

of sea-level rise; 30 million people are affected

by more extreme weather, especially flooding;

25 million people are affected by permafrost

thawing; and 5 million people are pressured by

desertification. The pressures that these combined

stresses put on affected communities are immense

and force or stimulate the movement of populations.

As is highlighted in the Ghana country study in this

report, they can also fuel violence and an erosion of

the social and economic fabric of communities.

The impact of climate change on Labour Productivity

is assessed here as the most substantial economic

loss facing the world as a result of climate change. A

large proportion of the global workforce is exposed

to the incessant increase in heat, with the number of

very hot days and nights increasing in many places

by 10 days a decade.2 Developing countries, and

especially the lowest-income communities, are highly

vulnerable to these effects because of geographical

location – northern countries like Scandinavia, it is

assumed, benefit from improved labour productivity

due to warmer weather – but also because their

labour forces have the highest proportion of non-

climate controlled occupational environments.3

Global productivity in labour is surging due to

technological advances and a shift of emphasis from

agricultural activities to an industrial and service

sector focus for most developing countries, among

other key developments.4 Climate change, however,

holds back the full extent of productivity gains

the world would otherwise enjoy.5 In this way, the

to be at least 150 billion dollars

per year today for developing

countries, rising to a minimum

of more than 1 trillion dollars

per year by 2030. These costs

are, however, considerably

lower than costs of damages to

developing countries estimated

here, so adapting to climate

change is very likely a cost-

effective investment in almost

all cases and should be central

to any climate change policy.

Beyond adaptation, this report

also emphasizes the urgency

of mitigating key risks: tackling

food security, indoor fires/

smoke, air pollution and other

health issues such as diarrheal

illnesses, malaria and meningitis

that are all urgent priorities

for lessening the extent of the

human toll of this crisis.

With costs due both to

unabated climate change

and the carbon economy

expected to rise rapidly over

the course of this century,

tackling climate change by

reducing emissions yields net

benefits to the world economy

in monetary terms – amounting

to around a 1% higher GDP

for the entirety of the 21st

century (net present value at

a 3% discount rate). World

net benefits from action on

climate change are insensitive

to discount rates from 0.1%

to 20% (the highest tested).

Even the most ambitious

reductions in emissions aimed

at holding warming below 2ºC

(e.g. 400ppm CO2e/IPCC AR5

RCP2.6 scenario) generates

economic benefits for the

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EXECUTIVE SUMMARY I 19

costs of climate change are hidden, which helps to

explain in part how their full extent may have been

missed. Even so, not all have benefitted from fast

expanding labour productivity: labour productivity is

a core indicator for MDG 1 (on extreme poverty and

hunger), for instance, where little progress has been

registered in many developing regions of the world,

in particular for sub-Saharan Africa and the Pacific.6

Not one country is invulnerable to the combined

effects of climate change and the carbon economy.

Inaction on climate change penalizes every country

in the world, just as all are set to gain from action

world economy after accounting

for the costs of reducing emissions

(mitigation costs). Limiting warming

to this level would limit human,

territorial and ecological damage

as well as other concerns, such as

climate-induced forced movement

of human populations.

Over 98% of all climate change

mortality and over 90% of all carbon

economy related mortality is in

developing countries: between 80%

and 90% of all economic costs

are projected to fall on developing

countries. The most extreme effects

of climate change are estimated

to be felt by the Least Developed

Countries, with average GDP losses of

8% in 2030. With respect to carbon

economy effects, inequitable access

to sustainable development sees

Least Developed Countries again

incurring the highest relative losses

at over 3% of GDP, while between

two thirds and three quarters of all

carbon economy costs are borne by

developing countries.

When the costs of climate change

and the carbon economy estimated

here are combined, not one country

in the world is left unharmed. In

terms of regional incentives to

tackle climate change, every region

is estimated to experience net

economic benefits from action on

climate change even for the highest

levels of action.

The Monitor only analyses

incremental impacts as a result of

climate change, or changes in the

frequency of well-known stochastic

events, such as floods and

landslides. Not assessed here in

any way are potential catastrophic

impacts that could occur due to

more rapid climate change fuelled

CLIMATE

CARBON

Acute Severe High Moderate Low

MULTI-DIMENSIONAL VULNERABILITY

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20 I EXECUTIVE SUMMARY

on climate change. Moreover, the vulnerability of

the world is shifting with every passing decade.

Countries once resilient to marginal weather effects

increasingly realize susceptibilities to a changed

climate as the increase in heat and associated

effects continue to reach new extremes.

Some quite serious damage is now unavoidable,

but certain losses can still be reduced in the short

term. In particular, human costs can be transferred

to economic costs. This can be achieved through

programmes aimed at reducing rural poverty – at the

origin of hunger deaths and many communicable

diseases afflicting the world’s poorest groups, with

risks that worsen with climate change. Or it can be

achieved by ensuring clean air regulations, safer

working conditions and modern energy options for

people at risk due to carbon-intensive forms of energy.

All these measures will save lives but cost money.

Economic losses themselves can also be lessened. A

major recent review of humanitarian assistance work

noted that Mozambique had requested 3 million

dollars from the international community for flood

preparations. That sum went unsecured, and 100

million dollars was subsequently spent on emergency

flood response.7 Investment in agriculture might

also be cost-effective if the costs of supporting

upgraded farming were to generate more benefits (in

productivity, output) than the initial outlay.8

There are, however, limits to the ability of

populations to adapt. The oceans can hardly be

refrigerated against marine stresses.9 Desert

encroachment can be prevented but rarely reversed,

and if so, generally at great expense.10 It might be

possible to protect a beach, but concrete polders

could well be to the detriment of an area’s authentic

charm and so to the value of properties.

A low-carbon, renewable economy – of hydro, wind,

solar, geothermal, tidal and other innovative sources of

energy – now competes with the most carbon-intensive

forms of power generation in the open market, where

they constitute around 10% of the global energy mix

today.11 Shifting the balance in favour of low-carbon

energy has been estimated to cost approximately 0.5%

or less of GDP for the current decade.12

The carbon economy is largely responsible for

the incredible growth in overall wealth society

has amassed over the last 200 years, although,

according to the World Bank, 1.3 billion people

continue to remain trapped in dire poverty.13

Regardless, an economic system developed to

support a global population of 1 or 2 billion people

in the 19th century is ill suited to a global population

in excess of 7 billion and growing.14

The climate challenge runs in parallel to other key

global developments: a growing world population,

a major propensity to urbanization, and structural

by feedbacks such as a release

of Arctic methane deposits, more

rapid sea-level rise that could result

from the disintegration of the West

Antarctic Ice Sheet or large-scale

climatic disruptions such as the

collapse of ocean circulation

mechanisms, all of which are

understood to pose significantly

larger human, economic and

ecological risks than anything

portrayed here. The possibilities

of these events are by no means

ruled out, with risks increasing

substantially with warming.2 Other

economists have therefore factored

such risks into their economic

analysis to a degree.3

Only with the deep and sustained

emissions reductions spelled out

in the lowest of the new IPCC RCP

2.6 scenario is there a reasonable

chance (comfortably over 50%) of

not exceeding the internationally

accepted “safety” temperature

threshold of 2ºC global mean

warming above preindustrial.4 Given

the clear human, ecological and,

REGIONAL COST BENEFIT ANALYSIS, 2010-2100** PERCENTAGE OF GLOBAL GDP (NOMINAL), NET PRESENT VALUE AT 3% DISCOUNT RATE

Climate + Carbon Costs Highest Action High Action Moderate Action Net Benefit

RegionNo

Action

Highestaction(400ppm)

Highaction(450ppm)

Moderateaction(550ppm)

Avoidedcosts*

Mitigationcosts

Avoidedcosts*

Mitigationcosts

Avoidedcosts*

Mitigationcosts

Highestaction

HighAction

Moderateaction

USA 3.0% 1.0% 1.0% 1.5% 2.0% 1.5% 2.0% 1.0% 1.5% 0.5% 0.5% 1.0% 1.0%

Japan 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.0% 0.0% 0.0%

Russia 4.5% 1.5% 1.5% 2.0% 3.0% 2.0% 3.0% 2.0% 2.5% 2.5% 1.0% 1.0% 0.0%

China 4.5% 2.0% 2.0% 2.5% 2.5% 2.0% 2.5% 1.5% 2.0% 1.0% 0.5% 1.0% 1.0%

India 11.0% 5.0% 5.5% 6.5% 6.0% 3.0% 5.5% 2.0% 4.5% 0.5% 3.0% 3.5% 4.0%

EU27 1.0% 0.5% 0.5% 0.5% 0.5% 1.0% 0.5% 0.5% 0.5% 0.5% 0.0% 0.0% 0.0%

ROW 8.5% 3.5% 3.5% 4.5% 5.5% 2.0% 5.0% 1.0% 4.5% 0.5% 3.5% 4.0% 3.5%

World*** 4.0% 1.5% 1.5% 2.0% 2.5% 1.5% 2.0% 1.0% 2.0% 0.5% 1.0% 1.0% 1.0%

*Avoided costs: No action (A1B +8.5 ) minus reduced ppm scenario (400 ppm C02e: RCP2.6; 450 ppm: RCP2.9; 550 ppm: SRES B1) ** Discounted (3%) sum of costs and GDP – mitigation costs from Edenhofer et al., 2010 (regional: Remind + Poles)*** Median value of all 5 scenarios (Edenhofer et al., 2010)

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EXECUTIVE SUMMARY I 21

shifts occurring in economies around the world.

All of these tendencies – most pronounced in

developing countries, in particular the process of

industrialization now spreading more and more

widely15 – can worsen or attenuate vulnerabilities to

climate change or the carbon economy.

In order to understand the fuller implications of this

study and to make its findings comparable with

previous works that take on longer-term perspectives,

the costs of climate change and the carbon economy

were also estimated for the period up until 2100. On

this basis, business-as-usual development could see

the costs of inaction exceeding 10% of global GDP in

losses prior to 2100.

Reducing emissions results in net benefits for society

in every case because the costs of a low-carbon

transition are more than outweighed by averted losses

due to climate change and the carbon economy.

In the global context, the highest level of emission

reductions results in similar global benefits to

lower levels of action. However, the highest action

sees fewer negative impacts on society –from

human health to biodiversity and for the world’s

oceans – but requires slightly greater investments

in low-emission forms of energy. Less ambitious

action means accepting larger scales of human and

ecological impacts.

The regional analysis of costs and benefits

differs little in fundamental terms from the global

analysis: all regions benefit from climate action in

economic terms. Most regions find optimal climate

action in the high-action scenario. The highest

action to reduce emissions also limits the risks

of crossing tipping points leading to large-scale

climate disruptions.16 Less ambitious action on

climate change does not: moderate action on

climate change has a high chance of exceeding the

accepted international temperature goal of holding

warming below 2° C (3.6° F) above pre-industrial

levels.17 The most vulnerable countries have called

for warming to be limited below 1.5° C above

pre-industrial levels as they believe 2° C is far too

damaging and a risk to their survival.

Neither should the risks of catastrophic impacts be

discarded as heresy: new research has highlighted

great risks associated with heat, as opposed to

ocean-related immersion of countries, with heat

risks concerning far greater shares of the world

economy and its population. In particular, at certain

levels of high-end warming, large areas of the planet

would progressively begin to exceed the thermal

maximum at which human beings are able to survive

outdoors.18 The possibilities of very rapid climate

change are not implausible or ruled out by climate

change models, especially as the planet warms

beyond the 2 degrees Celsius temperature threshold

ultimately, economic advantages of

aiming for a highest-action scenario,

this report’s findings imply that

the highest action targets would

reap the most benefits for the

world. Therefore, the highest-action

scenario is recommended to policy

makers as the preferred target for

enhancing and safeguarding global

prosperity. Mainstream economic

modelling shows that this transition

is technologically and economically

feasible but that action is needed

now to get onto this pathway.5

International cooperation will clearly

be central to ensuring that the costs

of the transition are maintained at

the lowest most efficient level and

that the transition yields the highest

co-benefits.6

ACTION VERSUS INACTION OVER THE 21ST CENTURYNPV OF GLOBAL CLIMATE/CARBON COSTS AND MITIGATION COSTS RELATIVE TO GDP (NOMINAL 2010-2100, 3% DISCOUNT RATE)

5%

4%

3%

2%

1%

0

MITIGATION COST CARBON COST CLIMATE COST

NO ACTIONACTION

1.1%

0.4%

1.8%

1.3%

2.1%

21ST CENTURY COSTS OF CLIMATE CHANGE ACTION, INACTION AND MITIGATION

8%

7%

6%

5%

4%

3%

2%

1%

0%

NO ACTION ACTION MITIGATION

2000 2010 2020 2030 2040 2050 20802060 20902070 2100

1 See: Edenhofer et al., 2010; IPCC, 2012a2 Weitzman, 2007; Hare in Mastny, 20093 For example: Hope, 2006; Stern, 20064 Pope et al., 20105 For an overview of some leading

mitigation scenarios, see: Edenhofer et al., 2010; UNEP, 2011; IPCC, 2012a

6 For example the economic benefits of cross-border emission reduction cooperation: De Cian and Tavoni, 2010

PERCENTAGE (%) OF NOMINAL GDP NON-DISCOUNTED

Action equals 450 ppm (RCP 2.9) No action equals mid-point of 2 non-stabilization scenarios (RCP 8.5 and SRES A1B)

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22 I EXECUTIVE SUMMARY

the international community has set for itself.19 Of

particular long-term concern are 1500 gigatonnes of

CO2 (GtCO

2) of methane stored in frozen sediments

in the East-Siberian Sea at depths of less than 40

to 50 metres.20 This represents three times the

amount of CO2 that could be released over much of

this century if the 2 degrees target is to be kept.21 As

the Arctic sea warms due to climate change, these

sediments are thawing and methane is already being

visibly released at rates that currently exceed the

total amount of methane emitted through natural

processes over the entirety of the world’s oceans.22

While all policy pathways for reducing emissions

have similar net benefits in economic terms, the

highest-action route would clearly reap the greatest

human, societal, economic and environmental

benefits, since it would ensure the greatest chances

of avoiding climate-triggered catastrophe and would

minimize the human, social and environmental

impacts of a hotter planet. Therefore, the cold

calculus of a hot planet implies the most ambitious

action on climate change is the savviest choice both

in monetary, humanitarian and environmental terms.

The highest-action approach is the pathway that the

analysis in this report most supports.

The world risks carbon lock-in due to high-intensity

carbon infrastructure plans still moving forward in

the near term, so the shift in focus to a low-carbon

transition should likely occur prior to 2017 and

continue aggressively thereafter.23 Several major

economies will need to adjust and enact important

domestic policy and legislative initiatives in order

to make this a reality. Whatever the case, action

on climate change that seeks out international

partnership is most likely to further lessen the costs

of a low-carbon transition and expand the benefits of

this transition for all concerned. This report documents

in part the potential benefits of avoided impacts of

climate change in addition to the potential co-benefits

of emission reductions that are targeted at key

economic, health and environmental concerns.24

CLIMATE+CARBON

2030ACUTE 2010

2030SEVERE 2010

2030HIGH

2010

2030MODERATE

2010

2030LOW

2010

54

21

31

27

38

59

55

73

6

4

CLIMATE

2030ACUTE 2010

2030SEVERE 2010

2030HIGH

2010

2030MODERATE

2010

2030LOW

2010

67

20

21

38

20

24

31

44

45

58

1 Hansen et al., 20052 Kjellstrom et al., 2009a; McSweeney

et al., 20123 ILO LABORSTA, 20124 Storm and Naastepad, 2009; Wacker et al.,

2006; Restuccia, et al., 2004; Storm and Naastepad, 2009; McMillan and Rodrik, 2012

5 Kjellstrom et al., 2009a-b6 UN, 20127 Ashdown et al., 20118 Parry et al., 2009; EACC, 20109 Cheung et al., 201010 Puigdefaabregas, 199811 US EIA, 201112 Edenhofer et al., 2010; IPCC, 2012b13 Chen and Ravallion, 201214 World Population Prospects/UN DESA, 201115 OECD, 2012; IMF WEO, 2012; World

Population Prospects/UN DESA, 201116 Pope et al., 201017 UNFCCC, 200918 Sherwood and Huber, 201019 Wietzman, 200720 Shakhova et al., 200821 Meinshausen et al., 200922 Shakhova et al., 2008 and 201023 IAE, 2011; UNEP, 201124 De Cian and Tavoni, 2010

= 5 countries (rounded)

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