E3G

Investing in the economics of climate security

By Nick Mabey

Avoiding extreme climate change

The last year has seen increased focus on the potentially extreme and catastrophic impacts of climate change. New science is showing the fragility of climate systems.

The Stern Review estimated climate change costs of 5-25% GDP - the combined costs of two World Wars and the Great Depression. The UN Security Council has also debated how climate change is already driving large scale social disruption and conflict in many parts of the world.

There is an increasing recognition that without climate security there will be no long term foundation for prosperity and stability. And in an increasingly interdependent world the breakdown of social and economic systems has high costs for us all.

To take just one possibility, security analysts from RAND Corporation have outlined a scenario where the European and US economies would be pitched into recession by widespread social instability in China driven by drought and food shortages. They believe that this could become a reality within the next two decades.

Indeed, recent research from James Hansen and others suggests that moving above a maximum of 450ppm (CO2 equivalent) would move global temperatures above 2°C and into a regime of “dangerous climate change”. This would present two types of catastrophic risks:

Firstly, there would be a high risk of irreversible climate change impacts; for example, melting of the Greenland ice sheet or large scale desertification.

Secondly, this would also generate “positive climate feedback” where higher temperatures in turn release more greenhouse gases from tundra, forests and beneath the oceans.

Such a scenario would mean that we would lose the ability to limit global temperature increases. The concentration of greenhouse gasses would no longer be primarily driven by human activity but by the disruption of the global carbon cycle itself.

Science is not advanced enough to tell us when these tipping points will occur. But the warning signs are there. This year carbon absorption in the southern oceans “shut down” - helping double the rate at which greenhouse gases are accumulating in the atmosphere.

What the best science does suggest is that the prevention of catastrophic climate change requires the stabilisation of emissions below 450ppm. But here is the analytical mismatch: surprisingly this target is not the focus of most economic and technical studies on climate mitigation.