Pledges by nations to cut carbon emissions will fall far short of those needed to prevent global temperatures rising by more than the crucial 2C by the end of the century. This is the stark conclusion of climate experts who have analysed submissions in the runup to the Paris climate talks later this year.
A rise of 2C is considered the most the Earth could tolerate without risking catastrophic changes to food production, sea levels, fishing, wildlife, deserts and water reserves. Even if rises are pegged at 2C, scientists say this will still destroy most coral reefs and glaciers and melt significant parts of the Greenland ice cap, bringing major rises in sea levels.
Two degrees is a political target and as such is obviously wrong. This is an economic problem and as such is only goiing to be solvable with economic logic.
The question is, how much is it going to cost? This is exactly how the Stern Review worked (no, don’t tell me about hiatus and all that, stick with the basic logic which is true whether there’s warming or not).
There’s some damages from it happening. There’s some costs to preventing it happening. So, how much preventing do we want to do in order to avoid how much cost?
Please note that this logic is correct whatever you think about climate science itself. It’s true if emissions have absolutely no effect, some, or truly ghastly amounts.
We might add in a little fudge factor for insurance purposes (Marty Weizman’s argument that uncertainty argues for more action) but the maximum amount we want to spend to avoid is equal to he damages we avoid by doing so.
And that inevitably means that how much we do is determined by how fast we try to make the changes and the methods by which we try to make the changes. Using more expensive methods more quickly means that we should optimally do less to reduce future damages. Because we’ve just chosen to do things in a doubly more expensive manner. Similarly, using the most economically effective methods (say, a carbon tax) and over time (working with the technological and capital cycle, a la Nordhaus, not Stern) means we can and should do more to avoid those future damages. Because we using doubly cheaper methods and so can and should do more damage reduction for the same cost.
And that’s why setting a temperature target is the wrong way to do it. Because it ignores the one single most important part of the calculation: how much money for how much money?