An economic solution say climate experts

The latest report from the UN's International Panel on Climate Change suggests that not only can global warming be slowed and reversed but the economic benefits of doing so "may exceed the costs of mitigation." One of the main reasons for the optimistic prognosis is the advancement in technologies such as wind power. But the turnaround still rests on removing market barriers to renewables and the use of economic mechanisms to discourage the continued consumption of carbon intensive fuels.

Not only can global warming be slowed and reversed in the next few decades but the economic benefits of doing so "may exceed the costs of mitigation," according to the latest report from the UN's International Panel on Climate Change (IPCC). Faster than expected advances in technologies such as wind power are one of the main reasons the report gives for its optimistic economic prognosis. Implementation of a portfolio of policy instruments including the removal of market barriers to renewables and the use of economic mechanisms to discourage the continued consumption of carbon intensive fuels are among the main means identified by the IPCC for achieving the turnaround.

The report, released early last month, is the third in recent weeks compiled by the around 900 IPCC scientists. It is an assessment of the technical, environmental and social aspects of mitigating climate change. The first report confirmed that global warming is caused by human activity, and the second set alarm bells ringing around the world when it reported that climate change was taking place far more rapidly than foreseen even five years ago and that social chaos and disaster caused by massive flooding will happen in just a few decades unless action is taken.

According to barrister James Cameron, an expert on international environment law speaking at a London conference on March 13 (main story), the three reports "have registered much higher in the political and commercial superstructure than before."

Significantly, the third report flags wind power several times as an important option. "Advances are taking place in a wide range of technologies at different stages of development, e.g. the market introduction of wind turbines," states a summary for policy makers. Fuel cell technology advances get special mention along with demonstrations of underground carbon dioxide storage and absorption of C02 in sinks or forests: "Although not necessarily permanent, conservation and sequestration of carbon may allow time for other options to be further developed and implemented," it states.

Time is of the essence. While economic modelling indicates that a gradual near term transition towards a less carbon emitting economy can minimise the costs of early retirement of fossil fuel plant, more rapid near-term action "would decrease environmental and human risk" and "stimulate more rapid deployment of existing low-emission technologies" which would help avoid "lock-in to carbon intensive technologies."

Marginal cost

The modelling also suggests that saving the world will only have a marginal effect on the world economy. "Half of these potential emissions reductions may be achieved by 2020 with direct benefits (energy saved) exceeding direct costs." The remainder would cost up to $100 per tonne of carbon equivalent removed (1988 prices). Indeed, according to the IPCC the costs of reducing emissions can be as low as 0.2% of projected GDP with no emissions trading and less than 0.05% of projected GDP with emissions trading in 2010.

The mix of policy options can include tax restructuring according to carbon content, tradable or non tradable permits, provision and/or removal of subsidies, energy mix requirements, and voluntary agreements. "Market based instruments may be cost effective in many cases," says the report, while green marketing plays a role in "informing and shaping consumer behaviour."

At least up until 2020 "relatively cheap and abundant fossil fuels" will dominate energy supply and conversion. But coal, possibly oil, and gas and certain energy intensive sectors "are most likely to suffer an economic disadvantage" in a carbon constrained economy, says the report. Renewables are among the industries that are expected to benefit. "Low carbon energy supply systems can make an important contribution," states the report. Among these it includes biomass, waste incineration, wind energy and hydropower and "the use and lifetime extension of nuclear power plants." The authors concede, however, that safety may constrain the use of some options. Furthermore, "Natural gas will play an important role in emission reduction along with more efficient energy conversion and the greater use of CCGT and co-generation."

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