The 21st Century climate challenge

What this means is that mitigation alonewill not provide a safeguard against adversedistributional outcomes linked to climatechange—and that, for the first half of the21 st Century, adaptation to climate change mustbe a priority, alongside ambitious mitigationefforts.Mobilizing public actionThrough the work of the IPCC and others,climate science has improved our understandingof global warming. Debates on the economics ofclimate change have helped to identify choicesover resource allocation. In the end though, it ispublic concern that will drive policy change.Public opinion—a force for changePublic opinion matters at many levels. Aninformed public understanding of why climatechange is such an urgent priority can create thepolitical space for governments to introduceradical energy reforms. As in many other areas,public scrutiny of government policies is alsocritical. In the absence of scrutiny, there is adanger that high-sounding declarations of intentwill substitute for meaningful policy action—aperennial problem with G8 commitments onaid to developing countries. Climate changeposes a distinctive challenge because, perhapsmore than in any other sphere of public policy,the reform process has to be sustained over along time-horizon.Powerful new coalitions for change areemerging. In the United States, the ClimateChange Coalition has brought together nongovernmentorganizations (NGOs), businessleaders and bipartisan research institutions.Across Europe, NGOs and church-basedgroups are building powerful campaigns forurgent action. ‘Stop Climate Chaos’ has becomea statement of intent and a rallying point formobilization. At an international level, theGlobal Climate Campaign is building a networkthat mobilizes across national borders, bringingpressure to bear on governments before,1The 21 st Century climate challengeBox 1.5Cost–benefit analysis and climate changeMuch of the debate over the case for and against urgent mitigationhas been conducted in terms of cost–benefit analysis. Importantissues have been raised. At the same time, the limitations of cost–benefi t approaches have to be acknowledged. The framework isessential as an aide to rational decision making. But it has severelimitations in the context of climate change analysis and cannot byitself resolve fundamental ethical questions.One of the diffi culties with the application of cost–benefi tanalysis to climate change is the time-horizon. Any cost–benefi tanalysis is a study in uncertainty. Applied to climate changemitigation, the range of uncertainty is very large. Projecting costsand benefits over a 10- or 20-year period can be challenging evenfor simple investment projects such as building a road. Projectingthem over 100 years and more is a largely speculative exercise. Asone commentator puts it: “Trying to forecast costs and benefits ofclimate change scenarios a hundred years from now is more the artof inspired guesstimating by analogy than a science.”The more fundamental problem concerns what is beingmeasured. Changes in GDP provide a yardstick for measuring animportant aspect of the economic health of nations. Even here thereare limitations. National income accounts record changes in wealthand the depreciation of the capital stock used in its creation. They donot capture the costs of environmental damage or the depreciationof ecological assets such as forests or water resources. Applied toclimate change, the wealth generated through energy use showsup in national income, the damage associated with the depletion ofthe Earth’s carbon sinks does not.Abraham Maslow, the great psychologist, once said: “If theonly tool you have is a hammer, every problem begins to look likea nail.” In the same way, if the only tool used to measure cost is amarket price, things that lack a price tag—the survival of species,a clean river, standing forests, wilderness—might look like theyhave no value. Items not in the balance sheet can become invisible,even though they have great intrinsic value for present and futuregenerations. There are some things that, once lost, no amount ofmoney can bring back. And there are some things that do not lendthemselves to market pricing. For these things asking questions justthrough cost–benefit analysis can produce the wrong answers.Climate change touches in a fundamental way on the relationshipbetween people and ecological systems. Oscar Wilde oncedefined a cynic as “someone who knows the price of everythingand the value of nothing”. Many of the impacts that will come withunmitigated climate change will touch upon aspects of human lifeand the environment that are intrinsically valuable—and that cannotbe reduced to the economics of the ledger sheet. That, ultimately, iswhy investment decisions on climate change mitigation cannot betreated in the same way as investment decisions (or discount rates)applied to cars, industrial machines or dishwashers.Source: Broome 2006b; Monbiot 2006; Singer 2002; Weitzman 2007.HUMAN DEVELOPMENT REPORT 2007/2008 65