Roger Pielke Jr has what I consider a tremendously important point about what the IPCC and the Stern Review are really saying when they focus on the costs of climate change to global GDP. It’s also one that Tim Worstall has made repeatedly, so I hope he’ll chime in here.
Basically, if we take global GDP as the metric for whether or not future generations suffer, then the choice of development pathway is a lot more important than restricting greenhouse gas emissions:
The IPCC finds global per capita GDP to be $4,000 in 1990. Under each of its four storylines it describes global per capita GDP for 2100 as follows (in constant 1990 dollars):
Under each storyline people around the world are significantly wealthier than they are today. The IPCC SRES report is careful to avoid a judgment of whether or not this is desirable. But because both Stern and IPCC WGII identify losses in GDP as being problematic, and a cause for action, we can safely conclude that both reports identify a higher GDP as being a better societal outcome than a lower GDP.
Now what happen when we factor in the effects climate change? For a 4 degree increase according to IPCC WGII these values would decrease by 5%:
And unmitigated BAU, according to Stern could reduce these values by as much as 20%:
So how the world chooses to respond to climate change, independent of how the world develops, will modulate future GDP by a factor of 1.05 to 1.20 (i.e., 5% to 20% found in IPCC WG II and Stern).
But implicit in the IPCC storylines, is how the world chooses to develop, independent of how the world responds to climate change, will modulate future GDP by a factor of up to 4.7 (i.e., the GDP in A1 divided by the GDP in A2). To put this another way, from the standpoint of global GDP, decisions that the world makes that make one storyline more likely to occur than another are between 19 and 74 times more important than decisions that are made about greenhouse gas emissions, under the assumptions provided by the IPCC! [19 ~= 3.7/0.2 and 74 = 3.7/0.05]
This is the main reason why some people have concluded that decisions about development, otherwise known as adaptation, must be front and center in any discussion of climate change.
Exactly. And whatever path we take, even the bad-sounding ones, the world will be much better off than it is today. Yet the world under the A1 scenario of very rapid economic growth will be able almost to shrug off the effects of climate change without noticing. Under the B1 scenario, the technological optimist’s dream, we’d still be much poorer. We should also note that Sir Nicholas Stern based all of his arguments on the A2 scenario – the one where the world is poorest.
In any event, these figures show that in a world where GDP is the important performance indicator, the most successful society is one where rapid economic growth and globalization is encouraged. We could then absorb the costs of even catastrophic climate change and still be over ten times richer in real terms than we are today. That’s resiliency, ladies and gentlemen.
Of course, there are decent arguments that global GDP is not the most appropriate metric. Yet that’s what the IPCC and Stern chose, and this is where their logic ends up, as Roger so rightly says.