Cost of climate deal delay comparable to the financial crisis, researchers say
The costs of delaying climate action could be equivalent to the financial crisis, a new paper warns.
Each year, world leaders meet to try and agree new targets to prevent the world from warming by no more than two degrees above pre-industrial levels. Progress has been slow, however – and the longer the impasse persists, the more costly climate action could become.
Delaying agreement is costly
The economic costs of failing to agree a deal before 2030 “are comparable to the costs of the financial crisis the world just experienced”, the paper’s lead author, Dr Gunnar Luderer, says in a press release.
The new paper compares the cost of action depending on whether there is a new international agreement in 2015, 2020, or 2030. It calculates that global economic growth could be reduced by about two per cent if an agreement comes in 2015. Economic growth would be reduced by around seven per cent if the new targets are set in 2030, however.
Luderer tells Carbon Brief that a carbon price of around $20 to $50 per tonne would be sufficient to keep warming to below two degrees if a new deal is agreed in 2015. But if policymakers wait until 2030, the cost rises to above $100. The EU carbon price is currently around â?¬8 per tonne.
The reason for the price jump is a lot more carbon dioxide would have been emitted than if an agreement is reached earlier, and more drastic – and expensive – action would be needed to keep warming below two degrees.
Relying on CCS
It’s not just about getting politicians to agree, however. The extent to which warming can be constrained depends on which low carbon energy technologies are available.
The paper identifies bioenergy with carbon capture and storage (CCS) technology as the most significant low carbon energy source. Biomass plants burn natural material, such as offcuts from plants and trees. Carbon capture and storage technology can be added onto the plants to lock away the power plant’s emissions. At the same time, plants can be grown to absorb more carbon dioxide – theoretically making the process carbon negative overall (as this video explains).
The paper calculates the lowest temperature change an international deal could aim for rises by 0.3 degrees if large scale biomass with CCS doesn’t come online.
But large scale CCS is still largely unproven. According to consultancy Poyry, the UK has the best prospects for the technology in Europe. But there are currently no commercial scale CCS plants in the UK and the government isn’t expected to commit to funding any new demonstration projects until 2015.
And the longer agreement is delayed, the more reliant the world could become on this as-yet unproven technology, the paper says.
Relying on unproven technology
Luderer says “continuing a wait-and-see strategy” is a costly option, and that it could “close the door for achieving climate targets in the long-term”. International climate negotiations have already had a number of false starts, if the world is going to keep warming to below two degrees, it doesn’t look like it can afford many more.