Copenhagen: Climate Change to Cost $300 Billion/Yr

101 days to go until the biggest climate jamboree ever seen.

The UN Copenhagen climate conference will be a defining moment in how humanity responds to the issue.

World leaders can either finally grasp the nettle by agreeing drastic cuts in CO2 levels, and getting out their check book to pay for it.

Or the conference will be yet another Diplomatic fudge and failure that slides the world towards an abyss of unimaginable horror.

One of the historical reasons for Governments not to respond is that it costs too much money to act. This argument has been repeatedly torpedoed by NGOs and the economist Lord Stern who have warned it is cheaper to act now that to suffer the economic consequences later.

And a new study shows that we have seriously underestimated those costs. The new report – by the International Institute for Environmental Development and the Grantham Institute for Climate Change – says the figure of $100 billion a year the UN estimates might be needed for adaptation could actually be as much as three times higher.

Professor Martin Parry, a former co-chair of the Intergovernmental Panel on Climate Change, said the earlier estimate missed out key sectors such as energy, manufacturing, retailing, mining and tourism. He said the cost will be even more when the full range of impacts of a warming climate are considered such as human migrations and refugees.

“Just looking in depth at the sectors the UNFCCC did study, we estimate adaptation costs to be two to three higher, and when you include the sectors the UNFCCC left out the true cost is probably much greater,” he said. “The amount of money on the table at Copenhagen is one of the key factors that will determine whether we achieve a climate change agreement.”

Parry said that “previous estimates of adaptation costs” which were based on “back of the envelope” calculations “have substantially misjudged the scale of funds needed.”

One such estimate was said to have been written “on the back of a metro ticket. We think these numbers are underestimates… they don’t stack up,”  he said.

The new report’s key findings include:

•    Water: The UNFCCC estimate of US$11 billion excluded costs of adapting to floods and assumes no costs for transferring water within nations from areas of surplus to areas of deficit. The underestimate could be substantial.

•    Health: The UNFCCC estimate of US$5 billion excluded developed nations, and assessed only malaria, diarrhoea and malnutrition. This could cover only 30-50% of the global total disease burden.

•   Infrastructure: The UNFCCC estimate of US$8-130 billion assumed that low levels of investment in infrastructure will continue to characterise development in Africa and other relatively poor parts of the world. But the new report points out that such investment must increase in order to reduce poverty and thus avoid continuing high levels of vulnerability to climate change. It says the costs of adapting this upgraded infrastructure to climate change could be eight times more costly than the higher estimates predicted by the UNFCCC.

•    Coastal zones: The UNFCCC estimate of US$11 billion excluded increased storm intensity and used low IPCC predictions of sea level rise. Considering research on sea level rise published since the 2007 IPCC report, and including storms, the new report suggests costs could be about three times greater than predicted.

•    Ecosystems: The UNFCCC excluded from its estimates the costs of protecting ecosystems and the services they can provide for human society. The new report concludes that that this is an important source of under-estimation, which could cost over US$350 billion, including both protected and non-protected areas.

So, if there is one lesson from history on climate it is better to pay up now or the costs will be much greater.

Will the politicians listen or finally pay up?