Tag Archives: Economics

A place at the negotiating table?

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fisheries

Fisheries must be included in the ongoing discussions of how the world’s most vulnerable can adapt to climate change. The future consequences for global fisheries are uncertain, but what is certain is that there will be winners and losers, and we can bet the losers will be those who don’t have much already, says a recent policy article published in Nature by Nicholas Dulvy and Edward Allison.

Warmer and more acidic waters could result in decreased fish stocks, altered fish migration routes and loss of important fish spawning grounds. Dulvy and Allison highlight that it is the poorest coastal nations of the world that are most susceptible to climate change effects on aquatic ecosystems. People of these vulnerable countries are highly dependent on fisheries for income and food security, while having limited societal capacity to adapt to the ongoing changes:

African and southeast Asian countries are the most economically vulnerable to climate change impacts on their fisheries and aquaculture sectors. Of the 33 nations identified as being most vulnerable to climate impacts on their fisheries sectors, 19 are among the world’s least developed countries, whose inhabitants are twice as reliant on fish and fisheries for food as those of more developed nations.

The authors plea that aquatic resources, and the people dependent on them, are included in upcoming global climate treaties. More specifically, they offer some policy recommendations. For example, combined targets of emission reductions and sustainable fisheries management could be reached by reducing the overinflated global fishing fleet. Countries doing so could gain carbon credits as this action represents a legitimate mitigation activity. Furthermore, a more flexible and diversified fishing sector, which can adapt to changes in catch composition and stock abundances, should be promoted. Finally, fisheries policies should be integrated into a wider development process. For example, artisinal fishers can be provided with alternative livelihoods that lessen their dependence on fisheries, while the social-ecological resilience of vulnerable fishing communities can be promoted by improving their infrastructure, access to markets and social services.

More than 50% fossil fuel reductions needed by 2050 to meet 2°C climate target

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Less than a quarter of the proven fossil fuel reserves can be burnt and emitted between now and 2050, if global warming is to be limited to two degrees Celsius (2°C), says a new study published in the journal Nature today.

The study has, for the first time, calculated how much greenhouse gas emissions we can pump into the atmosphere between now and 2050, to have a reasonable chance of keeping warming lower than 2°C (above pre-industrial levels) – a goal supported by more than 100 countries (2). We can only emit 1000 billion tonnes of carbon dioxide (CO2) between the years 2000 and 2050. The world has already emitted one third of that in just nine years.

“If we continue burning fossil fuels as we do, we will have exhausted the carbon budget in merely 20 years, and global warming will go well beyond two degrees,” says Malte Meinshausen, lead author of the study and climate researcher at the Potsdam Institute for Climate Impact Research. The three-year research project involved scientists from Germany, the United Kingdom and Switzerland

The study concluded that greenhouse gas emissions must be cut by more than 50 percent by 2050 relative to 1990 levels, if the risk of exceeding 2°C is to be limited to 25 percent.

“Only a fast switch away from fossil fuels will give us a reasonable chance to avoid considerable warming. We shouldn’t forget that a 2°C global mean warming would take us far beyond the natural temperature variations that life on Earth has experienced since we humans have been around,” says Malte Meinshausen. (Link to full story @ Potsdamn Institute for Climate Impact Research)

Will we leave the Great Barrier Reef for our children?

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Amidst the current policy debate in Australia on climate change is a surreal argument that policies that will destroy the Great Barrier Reef (GBR) are acceptable and economically rational. Ross Garnaut was alive to the damage to the GBR when saying Australia should initially aim for a global consensus to stabilise greenhouse gases in the atmosphere at 550 parts per million. Garnaut (2008a: 38) was brutally frank in his supplementary draft report:

“The 550 strategy would be expected to lead to the destruction of the Great Barrier Reef and other coral reefs.”

His final report does not shy away from this conclusion (Garnaut 2008b).

The Australian and Queensland governments have always silently avoided this point when explaining the costs and benefits of their climate policies. Neither has ever stated a stabilisation target for the rise in global temperatures or greenhouse gases. To do so would expose them to the criticism that their policies will not save the GBR or a host of other ecosystems.

Garnaut’s frank admission reflects the findings of research of the impacts of climate change to the GBR since mass coral bleaching occurred globally in 1998 and 2002. Rising sea temperatures and increasing acidity of the oceans due to our use of fossil fuels are now well-recognized as major threats to coral reefs and the marine ecosystem generally in coming decades.

Coral bleaching and partial recovery on Pelorus Island, GBR: (a) 1998; (b) 2002; and (c) 2004. Source: Schuttenberg H and Marshall P, A Reef Manager’s Guide to Coral Bleaching (GBRMPA, Townsville, 2006), p12.

Coral bleaching and partial recovery on Pelorus Island, GBR: (a) 1998; (b) 2002; and (c) 2004. Source: Schuttenberg H and Marshall P, A Reef Manager’s Guide to Coral Bleaching (GBRMPA, Townsville, 2006), p12.

In relation to coral bleaching the IPCC (2007b: 12) found that:

“Corals are vulnerable to thermal stress and have low adaptive capacity. Increases in sea surface temperature of about 1 to 3°C are projected to result in more frequent coral bleaching events and widespread mortality, unless there is thermal adaptation or acclimatisation by corals.”

The findings of the IPCC suggest that a rise of 1°C in mean global temperatures and, correspondingly, sea surface temperatures above pre-industrial levels is the maximum that should be aimed for if the global community wishes to protect coral reefs. The range of 1-3°C is the danger zone and 2°C is not safe. Supporting this conclusion Ove Hoegh-Guldberg and his colleagues concluded in a review of the likely impacts of climate change to the GBR edited by Johnson and Marshall (2007: 295):

“Successive studies of the potential impacts of thermal stress on coral reefs have supported the notion that coral dominated reefs are likely to largely disappear with a 2°C rise in sea temperature over the next 100 years. This, coupled with the additional vulnerability of coral reefs to high levels of acidification once the atmosphere reaches 500 parts per million [CO2], suggests that coral dominated reefs will be rare or non-existent in the near future.”

The IPCC’s (2007a: 826) best estimate of climate sensitivity found that stabilising greenhouse gases and aerosols at 350 parts per million carbon dioxide equivalents (ppm CO2-eq) would be expected to lead to a rise in mean global temperatures of 1°C, stabilising at 450 ppm CO2-eq will lead to a rise of 2°C, and stabilising at 550 ppm CO2-eq will lead to a rise of 3°C.

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The missing link in the “solutions” to climate change

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The recent Garnaut report states that “the solutions to the climate change challenge must be found in removing the links between economic activity and greenhouse gas emissions.” In order to successfully mitigate climate change impacts on both the environment and the economy, we need to go a step further and replace those links with avenues for sustainable economic activity. This can effectively begin with innovative designs for improving efficiency in energy production and usage.

Rather than compensating mining companies that are vulnerable to the new emissions trading scheme, the pledged compensation should be used to train employees of these companies with skills that will help them develop innovative designs for efficient energy usage to the commercialisation level. These high emission companies should begin investing in new technologies which could eventually be traded instead of coal to countries like China, in order to spread the improvements in carbon emissions to a global scale. Of course, this is the ten billion ton gorilla in the room that no one quite wants to recognise (at least not publicly!)

Credits to trade-exposed companies and low income households should only be considered to the extent that benefits are not initially received for their investment. Once benefits are realised, this monetary gain must be re-invested into future innovative solutions, thereby replenishing the funding for green solutions. Essentially, we need to amp up the green investment cycle.  For example, in the above situation a mining company burdens the cost of training some employees and using their work hours for sustainable development avenues.

Once the company receives return on their investment, re-investment into development of sustainable technologies should occur to the extent of the original “loan” or government credit. Similarly, households given credits, for example, to install solar panels should be encouraged to re-invest the savings on their electricity bills into new innovative technologies. The establishment of this positive feedback loop should be a condition of receiving the credits in order to prevent the misuse of the credits or the undermining of carbon trading.

The missing links in the solutions to climate change are the real ideas that will drive the economy towards sustainable development. Treading softly on this issue is not an option – time is of essence.  Another weak link in this much needed cycle is the fact that economic gain is our society’s key motivation and the environment is severely undervalued. The Garnaut Review states that environmental and social costs “are not amenable to conventional measurement”.

In other words, any cost-benefit analysis will not be accurate. Society’s real motivation needs to come from desire to maintain and conserve the environment for future generations. There is no adequate or accurate way to quantify this desire. And there is no way to ensure that that this desire is a top priority of world citizens. It seems that the best way to achieve this goal is to steer people’s actions economically. However, it is unlikely that the outcome will exhibit the same strength when motivated by monetary value.

Does humanity have the foresight to save itself?

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Mark Lynas is well known for his excellent book Six Degrees: Our Future on a Hotter Planet from 2007. In a recent edition of the Guardian (June 12 2008), he reports on the outcome of the Stockholm Network think tank examining current and future responses to climate change. The think tank concluded that the present scenario, which is called “agree and ignore”, and one which is referred to as “Kyoto Plus”, will not result in emission reductions before 2030.

The consensus within the modeling community is that we will exceed 450 ppm if global emissions do not begin to decline within the next 8 years. At this point, as argued here and elsewhere, we will lose coral reefs, wet tropical rain forests and many other high biodiversity systems. We will almost certainly enter in a period of very dangerous climate change at this point. Food and water security will decrease and conflicts will escalate.

The third scenario is termed “step change” and is particularly interesting and plausible. In this scenario, major catastrophes driven by climate change over the next decade lead to robust international commitments to cap emissions. Interestingly, this is done by regulating fossil fuel heavy companies as opposed to individuals and governments. Whatever the mechanism, however, many of us believe that this type of shock maybe required before any real action begins – a result of the apparently eternally optimistic nature of humankind.

Pity it has to be this way. Why can’t we just wake now and avoid all the pain? Read Mark Lynas’s account of why this will not happen.

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Caribbean tourism facing up to US$300m loss as coral reefs die

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Jamaica Gleaner, May 2nd 2008

Coral reef degradation could result in annual losses of US$100 million to $300 million to the Caribbean tourism industry by 2015, marine scientists are predicting.

Rick MacPherson, director of conservation programmes with Coral Reef Alliance (CORAL), said at a Turks and Caicos conference this week that almost two thirds of the region’s reefs were under threat. Coastal development, he said, threatens 33 per cent of the reefs, while land-based sources of pollution have harmed 35 per cent, and over-fishing more than 60 per cent.

“Caribbean reefs have suffered an 80 per cent decline in cover during the past three decades, while 80 to 90 per cent of elkhorn and staghorn coral is gone,” MacPherson said in his presentation at the 10th annual Sustainable Tourism Conference (STC-10).

Senior research associate from Oxford University’s Centre for the Environment, Dr Murray Simpson, another conference speaker, said this new reality includes a potential geographic and seasonal shift in tourism demand which will swing business away from the region. Research in 2004 showed that 70 per cent of coral reefs were at risk of collapse because of human pressures, up from 58 per cent in 2002. Underscoring that only a very tiny portion of the sea bottom is covered by coral reefs, 0.09 per cent, with a total area about the size of Arizona or the United Kingdom, the experts say they are home or nursery ground for 25 per cent of all known marine species.

MacPherson said the dive tourism industry in the Caribbean would be the hardest hit, should the quality of the dive experience be diminished. He further warned that the effects of such a loss would be felt not only by tourism but sectors such as medicine.

“Fifty per cent of current cancer medication research focuses on marine organisms found on coral reefs,” he said. “The drug AZT, which has prolonged the lives of thousands suffering from AIDS, comes through sponge species from coral reefs.”

The world’s coral reefs, he said, yield economic value of more than US$100 billion per year from food alone.

“They are the primary source of protein for over one billion people,” said the conservationist. “Coastal tourism generates 85 per cent of all tourism – a US$385 billion dollar industry.”

However, there is, he says, an economic disconnect in the annual inverstment in research, monitoring and management, which is less than US$100 million.