The Climate Solutions Dividend

April 3, 2009

Let me start at the beginning: the global climate crisis is far more serious than most people understand.

If we carry on with business as usual, our continued use of fossil fuels will destroy all human civilization as we know it, and take most species and ecosystems with it. As things stand, we are heading for a temperature rise of 4, 5, or 6 degrees by the end of the century. Today's Arctic meltdown and the current increase in forest fires, floods, and beetle infestations comes from a 0.7C increase.

"Do politicians understand just how difficult it could be, just how devastating rises of 4C, 5C or 6C could be? I think, not yet."
- Lord Nicholas Stern, Britain's top climate economist, March 2009.

"How far can it go? The last time the world was three degrees warmer than today which is what we expect later this century sea levels were 25 metres higher. So that is what we can look forward to if we don't act soon."
- James Hansen, Director of the NASA Goddard Institute for Space Studies, Feb 2006.

Business as usual is really grim, folks. We don't want to go there.

"The only certainty is that we have to act. How could I look my grandchildren in the eye and say I knew about this and I did nothing?"
- David Attenborough.

Next, let's look at the resistance. Some comes from elderly, well-educated men whose heads are firmly in the sand. Some comes from the coal and oil industry, which doesn't want to change what it's doing; and some comes from economists and bureaucrats who argue that we can't afford to act because it would harm the economy.

So let's look at the economy - the same one that the world's leaders are so desperate to revive so that we can get back to business as usual.

If we do nothing, the cost of future climate-caused floods, fires, droughts, hurricanes, and other disasters; the need to build sea walls two metres high around every port in the world; and the need to relocate 500 million refugees from low-lying lands will make today's recession look like a tea party. Not a pretty sight, by any accounting standard.

We also know that as soon as the economy gets back on its feet the global demand for oil will surge again, and prices will rise past $200 a barrel ($2 a litre, $6 a gallon) as we pass peak oil, with natural gas following. With the global oil supply in terminal decline, the speculative markets will drive the price ever higher.

Not a pretty sight either, from an economic perspective.

But now let us turn this around, and assume that we act on all the known solutions. Let's assume that we successfully eliminate all use of fossil fuels, and create a world in which:

  • All our buildings are super-efficient, and heated or cooled by solar, bioenergy, and heat-pump technologies;
  • All our transport uses electric and plug-in hybrid vehicles, combined with far more walking, cycling, transit, ridesharing, and railways;
  • All trucking, shipping, and aviation is powered by algae-biofuel grown on marginal and desert lands;
  • All electricity is renewable and most come from efficiency, wind, solar PV, solar thermal, geothermal, and hydro;
  • All of the world's farms, grasslands, and forests are managed holistically and organically, without need for chemical fertilizers.
  • Our whole economy operates on the principle of zero waste, recycling and re-using 100% of the materials we use.

What would such a world look like, financially? Shockingly, no-one has done such a study, but some numbers are available for the US to give us a start:

  • By eliminating the need to buy oil from the Middle East, and defend the oil-exporting nations, the National Defence Council Foundation has calculated in its report The Hidden Cost of Imported Oil (2007) that the US will enjoy an annual dividend of $825 billion. This includes a $138 billion military saving.
  • By eliminating the air pollution and smog caused by fossil-fuelled vehicles and coal-fired power plants, Terry Tamminen, past Secretary of the California EPA, has shown in his book Lives per Gallon: The True Cost of our Oil Addiction that the US will save up to $690 billion a year.
  • By reducing energy use by 15%, the American Council for an Energy-Efficient Economy has calculated that the US will enjoy annual savings of $169 billion. If efficiency is increased to 30%, this could rise to $338 billion.

This comes to $1.7 trillion a year, which would arrive in the US economy every year as a free stimulus package, without needing approval by Congress.

It also stands to reason that since 80% of the worlds wars are fought over oil and gas supplies, if we no longer need them we could disarm 80% of the world's militaries. For the US, with a $1 trillion annual military budget, this allows a peace dividend of $680 billion a year (excluding the $138 billion counted above). If we include this, the annual stimulus rises to $2.38 trillion.

This is the annual Climate Solutions Dividend - which must be contrasted with a 20% loss of annual GDP if we fail to end our use of fossil fuels, which would cost the US $2.8 trillion a year.

Will someone now please stand up and tell me we can't afford to tackle global warming because it will hurt the economy? I don't think so.

Guy Dauncey

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DocRichard April 4, 2009 at 2:03 a.m.  

Great stuff, Guy! We need the positive message, as well as the dire warnings. The greatest threat comes not from the climate change deniers, but from the feeling of hopelessness among good people who think "There is nothing I can do". We need to make a deliberate choice to be hopeful, and that way we can see the constructive path rising up before us.

JD April 4, 2009 at 6:05 p.m.  

There is no constructive path.

The dirty secret is that there's basically no point in addressing global warming at all. Here's George Monbiot:

But a recent paper in the Proceedings of the National Academy of Sciences shows that "climate change ... is largely irreversible for 1,000 years after emissions stop". Even if we were to cut carbon emissions to zero today, by the year 3000 our contribution to atmospheric concentrations would decline by just 40%. High temperatures would remain more or less constant until then. If we produce it, we're stuck with it.

Here's more:

Yet Kyoto matters little for the climate. Even if all countries had ratified it (the United States and Australia did not), and all countries lived up to their commitments (which many will have a hard time doing) and stuck to them throughout the 21st century (which would get ever harder), the change would have been miniscule. The temperature by 2050 would be an immeasurable 0.1°F lower and even by 2100 only 0.3°F lower. This means that the expected temperature increase of 4.7°F would be postponed just five years, from 2100 to 2105. (Source: Cool It by Bjorn Lomborg P. 22, citing Wigley, T.M.L. (1998). The Kyoto Protocol: CO2, CH4 and Climate Implications. Geophysical Research Letters, 25(13), 2285-2288.)

And more:

In fact, the world's leading scientists agree that it's already too late to halt global warming entirely. "We can't prevent some damage," says Stephen Schneider, co-director of the Center for Environmental Science and Policy at Stanford University. Even if we were to magically end CO2 emissions tomorrow, the gases that we've already unleashed will continue to raise temperatures for another 150 years. "That's unpreventable," Schneider says

Changing light bulbs and cutting down on bottled water is totally pathetic, and basically just another form of denial. Even halting all fossil fuel burning tomorrow wouldn't have a measurable effect for a hundred years.

The only economically feasible solution to global warming is stratospheric aerosols.

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