Urjit R Patel: A Stern warning

The challenge of global warming can be gauged by realising that all modern economic activities contribute to greenhouse emissions.

In a previous article, Business Standard, October 16, 2007, I had commented that the proximate reason why reaching a consensus on the scale, speed and durability of global warming has been painstakingly slow is the inherent uncertainty of the subject. Having said this, there is not only no dispute over pertinent facts, but also convergence from diverse sources over projections about the future. (Regarding climate science, the intergovernmental panel on climate change (IPCC) has been the key non-partisan multinational forum.) The associated estimates of the costs, including on human capital (comprising adverse consequences for agriculture, forestry, water cycles, mortality from vector-borne diseases, coastal zones, and heat stress), are provided in Stern Review: The Economics of Climate Change (SR), which is a magisterial state-of-the-knowledge primer on facts, risk assessments, challenges and policies for confronting global warming.

At the outset, here are some facts. (i) Accurate and widespread temperatures are available for only the last 150 years. Thus, a large component of temperature records are rebuilt from 'proxy' sources such as tree rings, ice cores, lake sediments, etc; (ii) the earth has warmed by 0.7ºC since 1900, of which the last three decades account for 0.6ºC, resulting in the global mean temperature elevated to what is probably at or near the warmest level reached in the current interglacial period (ie, between ice ages); (iii) the ten warmest years on record have occurred since 1990; and (iv) Earth's natural capacity to remove greenhouse gases (GHGs) from the atmosphere is considerably less than current emissions (only about a fifth).

The scope of the challenge can be gauged when it is appreciated that every type of modern economic activity contributes to GHG emissions. Power, including emissions from petroleum refineries, accounts for one-fourth of all global GHGs. Changes in land use, mainly driven by deforestation in countries like Brazil and Indonesia, account for 18 per cent of GHGs. Transport, industry and agriculture account for 14 per cent each of GHG emissions (it may be surprising to see agriculture in the list which is mainly on account of fertiliser use and livestock).

Decline in both carbon intensity of energy and energy intensity of output have slowed growth in global emissions of GHGs, but total emissions have still risen because of higher income and population growth. In the recent past, income growth per head has tended to raise global emissions by 1.9 per cent per year whereas reductions in global carbon and energy intensity have tended to reduce them by the same quantum; however, since world population has grown by 1.4 per cent per year, aggregate emissions have gone up. Carbon dioxide emissions per head have been strongly correlated with per-capita GDP across time and countries, which is not entirely surprising when we consider, for instance, how personal transport evolves: as a family becomes wealthier, the scooter gives way to the compact car, in turn followed by the mid-sized car, which is overtaken by the sedan, and, eventually, the SUV.

Calculations indicate that direct warming effect from a doubling of carbon dioxide concentrations (known as climate sensitivity) would lead to an average surface warming of 1ºC. But this is not all, the full warming effect of past emissions is yet to be realised; climate models project that the world is committed to a further warming of 0.5ºC-1ºC over several decades due to past emissions only. By comparing predictions of different climate models, the IPCC Third Assessment Report (IPCC TAR) concluded that the likely range of climate sensitivity is 1.5ºC-4.5ºC. Using this range, if GHG levels could be stabilised at current levels, global mean temperatures would eventually rise to around 1ºC-3ºC above pre-industrial temperatures (meaning on average up to 2ºC more than today); therefore, stabilising GHGs at current levels is unlikely to save us from serious adverse implications. Even more disturbing, some recent studies have shown upto a 20 per cent chance that climate sensitivity could be greater than 5ºC. Temperatures may already be at the limit of human tolerance (peak temperatures in the Indo-Gangetic Plain presently exceed 45ºC). In cities, heat waves will become increasingly hazardous with the urban heat island effect leading to extreme temperatures and more dangerous air pollution episodes. There is also a (rare) silver lining; for example, in northern latitudes global warming may lead to fewer cold-related deaths.

The effect of climate change will be most acutely felt through changes in the distribution of water around the world, and its seasonal and annual variability. Impacts, however, are likely to be uneven. The water cycle will be intensified with drought and floods becoming more severe in many parts. For instance, the Mediterranean, parts of Southern Africa and South America are likely to experience further decrease in water availability; on the other hand, South Asia, parts of Northern Europe and Russia are likely to experience increase in water availability (runoff).

Developing countries are especially vulnerable to climate change on account of geography, low incomes (which undermines adaptive capacity), and greater reliance on climate-sensitive sectors such as agriculture. Climate scenarios reveal that the most serious impacts are likely to be in Africa, West Asia, India and South-East Asia ("tropical geography has a substantial negative impact on output density and output per capita compared to temperate regions"). By the middle of the century, 150- to 200- million people may become permanently displaced due to rising sea levels by flooding from coastal storm surges (again, South- and East- Asia will be most vulnerable). In SR's baseline climate scenario for estimating the economic costs of global warming, the mean cost to India and South-East Asia is around 6 per cent of regional GDP in the long run, compared with a global average of 2.6 per cent of GDP. We can ill afford to be smug, the SR cogently observes: "India's economy and social infrastructure are finely tuned to the remarkable stability of the monsoon, with the result that fluctuations in the strength of the monsoon both year-to-year and within a single season, can lead to significant flooding or drought, with significant repercussions for the economy".