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Why climate change cannot be ignored

13-Nov-2006

Ignoring climate change will cost countries billions and lead to food scarcity.

The Stern Review, commissioned by the UK's chancellor in July last year and published last week, is the most comprehensive study ever on the economics of climate change.

It is not some hysterical environmentalist rant. It is a sober wake-up call to those that still have their heads in the sand.

Climate change, it says, is the greatest market failure the world has ever seen.

Pre-industrial levels of greenhouse gases in the atmosphere were 280ppm CO2 equivalent (CO2e). The current concentration is 430ppm CO2e. Unabated climate change, caused by CO2 emissions, risks raising average temperatures by over 5C from pre-industrial levels.

Taking the most recent scientific evidence, the economic effects on human life and the environment and weighting the effects appropriately, the review estimates that the damage could be equivalent to 20 per cent of GDP or more.

Such changes will also transform the physical geography of our planet. Agricultural practices would be catastrophically altered beyond recognition in many parts of the world, as the UN's current climate change conference in Nairobi confirms.

But there has been little focus on the role of agriculture in climate change. Both agriculture and the food industry are not major producers of CO2 emissions. In the UK agriculture is responsible for just 2.5 per cent of CO2 emissions.

It is the effect, rather, of climate change on these sectors that can no longer be ignored.

A temperature increase of just 2C would dramatically decrease productivity in many parts of the world. Such a rise might raise agricultural productivity in colder climates no one really knows for sure. But the net effect would likely be a decline in output especially in the poorer south.

What's more, low-lying agricultural areas will increasingly be more susceptible to flooding. This will pose a significant challenge to farmers especially as most attention will be focused on protecting built-up areas rather than the countryside.

All this with a global population of 6 billion, estimated to touch 10 billion within the next few decades, in need of food.

Up until now it has been relatively simple to dismiss climate change as a natural phenomenon, or even as a grossly exaggerated problem. Even today, no scientist can predict exactly how much temperatures will increase in the near future, or how the planet will respond.

But what is emerging is a growing consensus that doing nothing will be a hell of a lot more expensive than taking preventative action.

The Stern review estimates that the costs of action to reduce greenhouse gas emissions to avoid the worst impacts of climate change can be limited to around 1 per cent of global GDP each year. People would pay a little more for carbon-intensive goods, but economies could continue to grow strongly.

Reducing emissions will make us better off, and stave off the threat of food scarcity. According to one measure, the benefits over time of actions to shift the world onto a low-carbon path could be in the order of $2.5 trillion each year.

Agriculture policies and practices will have to meet changing climate regimes. A significant transition toward biofuels over the next 50 years is needed, with agriculture and forestry among the leading sources for both liquid and solid fuels.

Crops such as sugar cane, corn and soybean are already being used to produce ethanol or bio-diesel.

But above all, the agriculture and food sector needs to become engaged in the debate. It must find its voice. It is not a big polluter or emitter of CO2, but it will be one of worst hit sectors if climate change is not tackled.

Tackling climate change now is the only option. Ignoring it will undermine economic growth - and contribute to food scarcity.

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