Harrabin's Notes: Spending $250bn

BBC News 4 Sep 09;

In his regular column, the BBC's environment analyst Roger Harrabin draws on his experience of a quarter of a century reporting the environment to assess the thesis of two veteran environmentalists who believe the Copenhagen climate meeting will not deliver results.

HOW BEST TO TACKLE CLIMATE CHANGE

While nations tussle over the size of the pot to combat climate change at their international gathering in Copenhagen in December, a panel of leading economists has drawn up priorities for how the contents of any pot should be spent.

The panel, convened by the controversial Danish author Bjorn Lomborg, concludes that best value for money lies in geo-engineering, energy research and adaptation. Worst value for money are taxes on carbon.

In a further swipe at conventional thinking, the panel concludes that the only intervention on its list deemed less efficient than carbon taxes is the emissions trading system employed by the EU and proposed by the US.

The panel said that while a well-designed gradual policy of carbon cuts could substantially reduce emissions at low cost, poorly designed or over-ambitious policies could be orders of magnitude more expensive.

The two-day panel's findings was instantly dismissed by some critics as "junk economics."

Planet engineering

One particularly controversial priority of the panel is is research into "cloud whitening", which involves spaying tiny droplets of water into ocean clouds in order to increase their reflectivity.

The UK Met Office says this could disturb regional weather systems. And a 10-month Royal Society report on geo-engineering this week said although cloud whitening had advantages, there were many questions to be answered.

Marine scientists complained that cloud whitening fails to combat ocean acidification - the "other" CO2 problem, and could even make it worse.

The panel is the latest to be convened by Dr Lomborg, author of 1998 book The Skeptical Environmentalist, whose work was previously strongly supported by The Economist magazine.

His panels are known as the "Copenhagen Consensus" and have concluded in the past that if governments wanted to improve human welfare, tackling climate change was a poor option.

This year, five economists, including three Nobel prize winners, were asked to decide how best to spend up to $250bn a year to deal with climate change. They rated ideas in this order:

The total of the "Very Good" and "Good" solutions amounts to around $110bn a year from 2010-2020. This is slightly more than the figure mentioned by Gordon Brown as an appropriate contribution from rich countries to poor nations.

The panel said geo-engineering reduced the risk of "pork barrel politics" (as seen in bucketloads in the US Waxman-Markey climate bill) and lowers costs. In the case of a low-probability, high-impact climate change, it could play a crucial role because of its speed.

It said there was a compelling case for greater research into energy storage, batteries, nuclear energy, second-generation biofuels, wave energy, geothermal, carbon capture and storage (as a bridging solution), and also in technologies that increased the conversion rate of fossil fuels.

It said planning for adaptation was unavoidable and might serve multiple purposes, including helping developing countries in terms of development and general disaster readiness.

In the "fairly good" value for money category, the panels put technology transfer from rich countries to poor, and investment in forestry. The latter reduces global warming and aids biodiversity. It didn't get a higher rank because it was considered to be a relatively costly way of cutting carbon, with regulatory challenges over implementation.

Cooking stoves for poor people in developing countries (which cut "black carbon" emissions, ie soot) scored high as a health investment but the panel noted that there was uncertainty over the contribution of black carbon to climate change. Carbon taxes propped up the list.

Dr Chris Hope, a former IPCC lead author, told me he approved of attempts to assess value for money in climate change but described the panel's review as "flawed in many ways".

The panel's dismissal of carbon taxes "is something that should have been left behind years ago", he said. "The Stern review assessed the full risks of climate impacts and came to a very different conclusion: that climate mitigation and carbon taxes are urgently needed."

Professor Sir David King from the Smith School in Oxford said he would put this report straight out of his mind: "Lomborg has been rubbishing all action on climate change in the past, so he has no track record in this area.

"It's a bizarre question asking how a certain sum of money should be spent because that's not the way the global community works. The Royal Society were very sceptical about cloud whitening but Lomborg's panel put this top.

"Why did they have no scientists or technologists who would be able to evaluate solutions? Also, after their failure over the 'credit crunch', I think people will be very wary of taking the advice of economists."

Professor Tom Burke from Imperial College London, UK, was similarly scathing: "The Potsdam Institute's big science conference explained why a cost-benefit approach was an inappropriate way to look at the choices presented by climate change. This latest Lomborg stunt is junk economics and the fact that it is carried out by distinguished economics simply means that it is distinguished junk economics."

And Dr Jean-Pierre Gattuso, a leading expert on ocean acidification from the Oceanographic Laboratory in Villefranche, France, warned that the cloud whitening plan favoured by the panel could exacerbate current acidification. "Ocean acidification is a potentially critical threat for the oceans and the human life support system," he told me.

"Reducing CO2 emissions is the only proven way to limit ocean acidification. Solar management techniques (like whitening) would not prevent ocean acidification; in fact, they might even increase it as CO2 emissions could continue unabated with no, or a limited, increase in temperature."

Environmental plumage

But Robert Falkner from the Grantham Institute at LSE told me that Lomborg should be commended for the effort to put a price on different strategies.

"World leaders need to have a clear understanding of the choices they face. But the ranking exercise is not entirely convincing. The Panel follows overly optimistic predictions of what geo-engineering can achieve but is guided by pessimistic calculations of the cost of reducing greenhouse gas emissions in the near future."

But the panel and its leader defended their work. Nobel scientist Thomas Schelling said: "Even if one approaches climate engineering from a sceptical viewpoint, it is important to invest in research to identify the limitations and risks of this technology sooner rather than later."

And Lomborg himself said: "I hope that their findings are seriously considered by policy-makers. Their work also makes it clear that current carbon taxes and cap-and-trade policies are very poor answers to global warming. We need to re-think our priorities to best respond to this challenge."

Lomborg has ruffled so many green feathers in the past that policy-makers may be deaf to his advice. But supposing that Copenhagen does produce a pot of gold, the world definitely needs a more open debate on how it is spent before the special pleading of industries seizes politicians' minds.

And let's not forget, the spending that this panel identifies as useful for combating climate change is highly unlikely to happen unless governments can generate extra funds from the sort of carbon taxes the panel despises.