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June 16th, 2007
Intergovernmental Panel on Climate Change

For example, a sacrifice of between one and two years’ economic growth could mean a cut of 50 per cent in emissions by 2050.

The report of Working Group I, in February, suggested that stabilising CO2 at 450-500 ppm would see global GDP grow by 345 per cent, to 2050. With no action at all, it would grow by 350 per cent, only a negligible increase.

The report suggests that the carbon price needed to achieve this would be, at most, US $50 per tonne of carbon dioxide. This implies that petrol prices would increase by 4-10 cents a litre, and electricity by 2-5 cents a kilowatt hour, depending on the government’s tax regime.

These are the costs of cutting emissions. It does not take into account the economic benefits of minimising climate change. The report urges caution in making judgements in the absence of more studies. But it concludes that even in the worst case, the costs of reducing carbon emissions will be less than the likely damage.

This is the same conclusion as the Stern Review. Even in purely economic terms, it makes sense to sharply cut emissions.

But a British bureaucrat wrote the Stern review; Western interests heavily influenced the IPCC report. How will regional governments react?

They should welcome it. The report eliminates the main reason – the cost – that governments have given for refusing to take measures to cut emissions.

It might be worth thinking about if you are stepping into the fumes of Beijing or Jakarta this morning.

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