Climate action could cost 10pc of GDP, says the IPCC

AGGRESSIVE action to limit the rise in global mean temperature to 2C could cost more than 10 per cent of world GDP by century end.

AGGRESSIVE action to limit the increase in global mean temperature to 2C could cost more than 10 per cent of world GDP by the end of the century, according to the latest report from the UN’s Intergovernmental Panel on ­Climate Change.

And in order to have a “likely” chance of achieving the target, by mid-century greenhouse gas emissions must be lowered by 40 per cent to 70 per cent compared with 2010 levels, and to near zero by the end of this century. The report confirms the billions of dollars already spent on renewable energy policies had failed to slow growth in global carbon dioxide emissions, which had accelerated in the 10 years to 2010 to become the highest level in human history.

The global economic crisis of 2007-08 had provided only a temporary reprieve from rising greenhouse gas emissions.

“Despite a growing number of climate change mitigation policies, annual GHG emissions grew on average by 2.2 per cent a year from 2000 to 2010 compared to 1.3 per cent a year from 1970 to 2000,’’ the report says. “Increased use of coal relative to other energy sources has reversed the longstanding trend of gradual decarbonisation of the world’s energy supply.’’

The IPCC encourages policymakers to redouble efforts to remodel the world’s electricity system despite a rising voter and business backlash to higher electricity prices, which have been blamed in part on high renewable energy subsidies.

The report concedes that “many renewable energy technologies still need direct and/or ­indirect support, if their market shares are to be significantly ­increased’’. But it says “cutting emissions from electricity production to near zero is a common feature of ambitious mitigation scenarios’’.

The report, “Climate Change 2014: Mitigation of Climate Change”, is the third of three working group reports, which, along with a “synthesis report” due in October, constitute the IPCC’s Fifth Assessment Report on climate change.

The report said “major institutional and technological change” was needed to give a “better than even chance” of keeping the increase in global mean temperatures to 2C above pre-industrial levels.

It said estimates of the eco­nomic costs of mitigation varied widely, but ambitious mitigation would reduce global consumption by 0.06 percentage points a year, without accounting for any economic benefits of reduced ­climate change.

A table in the report shows ­aggressive action to limit greenhouse gas accumulations to 450 parts per million would cut global consumption 1-3.7 per cent by 2030 and up to 11.4 per cent (2.9-11.4 per cent) by 2100.

The best-case cost assumption was based on a scenario in which all countries of the world begin mitigation immediately, there is a single global carbon price, and all key technologies are available. None of these three requirements exist.

The report says there is scope for carbon emissions savings from greater energy efficiency in industry, buildings and transport and changes in land-use practices.

The biggest, quickest reductions could come from changes to power generation, including the switch to more efficient coal plants and greater use of gas.

Nuclear energy could make an increasing contribution to low-carbon energy supply, but a ­variety of risks exist, it says.