Economists warn climate change will cost trillions if governments fail to act

MEDIA ADVISORY
Friends of the Earth International

13 October, 2006

The report, Climate Change – the Costs of Inaction, was compiled by leading economists at the Global Development and Environment Institute at Tufts University in the U.S. for Friends of the Earth’s climate campaign. [1]
The survey, which brings together the very latest scientific and economic thinking on climate change, highlights the enormous costs that would result if Governments fail to act to keep temperatures below two degrees.
It is estimated that annual economic damages could reach USD 20 trillion by 2100, equivalent to 6 – 8 percent of global economic output at that time [2]. However even this figure is likely to be an under estimate as it does not include the cost of biodiversity loss or of unpredictable events such as extreme weather or collapse of Gulf Stream. The true costs of climate change are, according to Tufts University economists, incalculable.
The report also reveals the comparatively small amounts of money needed to keep temperatures in check. Action to limit temperature increases to two degrees could avoid USD 12 trillion in annual damages at a cost of only USD 3 trillion per year – a quarter of the amount [2].
Global temperatures have already risen by 0.6 degrees above pre-industrial levels. If emissions continue to rise unchecked global temperatures could increase by more than 4 degrees centigrade by 2100. The report looks at scientific and economic predictions on the impact of climate change as temperature rise:

TWO DEGREE RISE IN TEMPERATURES
Decreased crop yields in the developing world will spell disaster for many poor farmers and poor countries whose economies are dependent on agriculture production. Widespread drought and water shortages will also to hit the developing world hardest where millions of people are already living without access to clean safe drinking water. Other impacts include a near total loss of coral reefs – of vital importance to fisheries and the tourist industry; the expanded northward spread of tropical diseases such as malaria; and the potential extinction of arctic species including the polar bear.

THREE DEGREE RISE IN TEMPERATURES
Decreasing crop yields in developed countries, will lead to decreasing world food supplies. Disease will spread – for example the incidence of diarrhea, a killer in the developing world, is predicted to increase by six per cent in Africa. The rise in temperature will also lead to widespread species extinctions; increasing desertification; the wholesale collapse of the Amazon ecosystem; and the complete loss of all boreal and alpine ecosystems.

FOUR DEGREE RISE IN TEMPERATURES
Melting of the West Antarctic ice sheet will gradually increase sea levels by five to six metres putting vast tracks of land underwater and producing millions of environmental refugeesIn Bangladesh, where half the population lives in areas less then five metres above sea level, permanent flooding and shortages of drinking water could result in 30 – 40 million people being displaced from their homes. Elsewhere entire regions will have no agricultural production whatsoever as a result of the changing climate.

MORE THAN FOUR DEGREE RISE IN TEMPERATURES
There is a 50 per cent chance that the ocean’s circulation system will shut down, removing the crucial currents that warm and stabilize the climate of Northern Europe.
Dr Frank Ackerman, Director of the Research and Policy Program at the Global Development and the Environment Institute and one of the authors of the report, said: “The climate system has enormous momentum, as does the economic system that emits so much carbon dioxide. Like a supertanker, which has to turn off its engines 25 km before it comes to a stop, we have to start turning off greenhouse gas emissions now in order to avoid catastrophe in decades to come.”
Elizabeth Bast from Friends of the Earth US said:
“This report demonstrates that climate change will not only be an environmental and social disaster: it will also be an economic catastrophe, especially if global temperatures are allowed to increase by more than 2 degrees centigrade.”

FOR MORE INFORMATION CONTACT
In Washington, DC:
Elizabeth Bast, Friends of the Earth US, +1 202 222 0716
In London, UK:
Catherine Pearce, Friends of the Earth International Tel: +44-7811 283 641 (mobile)
Friends of the Earth Press Office in London, UK, on +44-207 566 1649 or on +44-7764 364 187 (mobile)

NOTES TO EDITORS
[1] The report is available online at http://www.foe.co.uk/sites/default/files/downloads/econ_costs_cc.pdf
[2] Based on a study by the German Institute for Economic Research; estimates in US dollars