The politics and economics of Climate Change

Crikey points to the 2007 HV McKay lecture (PDF) by Lord Nigel Lawson. He realistically points out to the economic and political aspects of the climate change debate. And importantly points out to the actual economic status of developed countries hundred years hence and the capacity of humans to adapt.

“More important still,” he told his audience at the Institute of Public Affairs, “the science is only part of the story. Even if the climate scientists can tell us what is happening and why—not that they all agree about this, anyway— they cannot tell us what governments should be doing about it. For that we also need an understanding of the economics, of what is the most cost-effective way of tackling any problem that may arise. And we also need an understanding of the politics: of what measures are politically realistic, a particularly tricky matter given the inescapably global nature of the issue.”

Crikey says: No doubt this is an unfashionable note of realism for many people but central to the proposition put by Lord Lawson is the “grudging and inadequate treatment of adaptation” by the Intergovernmental Panel on Climate Change (or IPCC). He argues:

The IPCC prefaces its assessment with the statement that “The magnitude and timing of impacts will vary with the amount and timing of climate change and, in some cases, the capacity to adapt”. But adaptation will always occur.

The capacity to adapt is arguably the most fundamental characteristic of mankind. We have adapted to different temperatures over the millennia we have been around, and we adapt today to widely different temperatures around the world. And that adaptive capacity is increasing all the time with the development of technology.

Yet the concept of static “adaptive capacity” is central to the IPCC’s analysis. Thus in its review of the dangers in different parts of the world, it explicitly acknowledges that, in the case of Australia and New Zealand, these will be limited by the fact that “The region has substantial adaptive capacity due to well-developed economies and scientific and technical capabilities”. Presumably the same applies to Europe and North America, although, curiously, the IPCC does not say so.

But it does express concern about the effect of projected warming on the poorer regions of the world, particularly in Africa and parts of Asia, because of their “low adaptive capacity”. This somewhat patronizing judgment seems ill-founded for three reasons. First, as we have seen, on the IPCC’s own economic growth projections, on which its temperature projections rest, the poorer regions are, for the most part, not going to be poor in a hundred years time.

Second, for those parts that do remain poor, overseas aid programmes will clearly be focused on improving their adaptive capacity, should the need arise. (This is, incidentally, a much more realistic objective for overseas aid than the promotion of economic development.)

And third, there will almost certainly be substantial technological development over the next hundred years, which will significantly enhance adaptive capacity worldwide, in many cases far beyond what it is at the present time.


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