Lee Poh Onn, Straits Times 9 Mar 09;
DOES climate change matter at all? Has global warming been exaggerated? Is it a hoax?
A working paper issued by the US-based National Bureau of Economic Research (NBER) in November last year suggested that the impact of climate change on global economic growth may not be as severe as previously believed.
This contradicts the claim of the Stern Review on the Economics of Climate Change issued by British economist Sir Nicholas Stern in 2006. He had suggested that an investment equal to 1 per cent of global GDP would be required to ward off the detrimental effects of climate change. If nothing were done, global GDP might fall by as much as 20 per cent, he suggested.
The NBER paper noted that higher global temperatures would have an impact on poor countries but not rich ones. An increase of 1 deg C will reduce economic growth by about 1.1 percentage points in poor countries. Rich countries will be able to ward off the impact of global warming.
Since rich countries make up the bulk of global GDP, their ability to minimise the effect of global warming will mean that the impact of climate change on the global economy will be limited. The NBER study, however, does not take into account the fact that political unrest caused by climate change in poor countries may affect rich countries as well. If this is taken into consideration, global GDP may be affected by climate change.
To place doubt as to the necessity of cutting carbon emission immediately, there is evidence to suggest that global temperatures may have been cooling rather than warming since 1998, and that climate change could be linked to activities on the sun rather than on human action. Evidence is still anecdotal at this point but is gathering momentum nevertheless. One scientist who questions the link between human actions and global warming is Dr Will Happer of Princeton University, who served as director of energy research at the US Department of Energy from 1990 to 1993.
Does that mean we should stop all measures to curb greenhouse gas emissions?
The potential negative impacts of climate change on the global economy cannot be disputed though the strength of the causal relationship bears further study. Regardless of which faction in the climate change debate is correct, the climate change movement has generated a new sense of environmental awareness.
Another positive from the climate change movement is the search for alternative fuels. It has been estimated that we have about 75 years of fossil fuels left. Long before we reach that point, markets will be subject to massive swings in oil prices. Despite its flaws, the climate change movement has helped to spur the search for alternative fuels.
The writer is a fellow at the Institute of Southeast Asian Studies.
