Economics, memory loss and climate change (Day 118)

We often use the concept in relation to process safety when we fail to learn the lessons of the past to catastrophic effect.

A few days ago I wrote a blog called No time to wait in relation to climate change.

I thought I'd return again quickly to the same topic to show how the knowledge, lessons and messages from the past can easily slip away into inaction - especially as the United Nation's Climate Change Summit is being held tomorrow in New York.

On 30 October 2006, a review was published by Sir Nicholas Stern, head of the UK government economic service and former World Bank chief economist.

If independent scientific evidence has steadily eroded the resistance of climate change sceptics, Stern's review helped to dismantle one of the other biggest perceived barriers to tackling climate change - money.

Stern's review said: "the economic effects on human life and the environment, and approaches to modelling that ensure the impacts that affect poor people are weighted appropriately. Taking these together, the Review estimates that the dangers could be equivalent to 20 per cent of [Gross Domestic Product] GDP or more.

"In contrast, the costs of action to reduce greenhouse gas emissions to avoid the worst impacts of climate change can be limited to around one per cent of global GDP each year. People would pay a little more for carbon-intensive goods, but our economies could continue to grow strongly."

The review continued: "If we take no action to control emissions, each tonne of CO2 that we emit now is causing damage worth at least US$85 – but these costs are not included when investors and consumers make decisions about how to spend their money.

"Emerging schemes that allow people to trade reductions in CO2 have demonstrated that there are many opportunities to cut emissions for less than US$25 a tonne. In other words, reducing emissions will make us better off. According to one measure, the benefits over time of actions to shift the world onto a low-carbon path could be in the order of US$2.5 trillion each year.

"The shift to a low-carbon economy will also bring huge opportunities. Markets for low-carbon technologies will be worth at least US$500bn, and perhaps much more, by 2050 if the world acts on the scale required."

Even today, nearly eight years later, these are persuasive numbers. Sadly, the Stern Review probably hasn't galvanised governments and business to the extent it deserved.

But climate change is an issue we can't ignore and another welcome report was published last week, which makes the economic case again for mitigating climate change. It's a report supported by the UN and will be featured during the Climate Change Summit.

Better Growth, Better Climate The New Climate Economy has been published by the World Resources Institute (WRI) supported by eight global institutes.

Similar to the review by Stern, who attended the launch last week, WRI's report leads us to believe that the 'world can achieve economic growth and tackle climate change at the same time'.

Andrew Steer, WRI's president & CEO, said: "Contrary to popular myth, the New Climate Economy report shows we can now have economic growth and climate action together.

"Drawing on the best research available, the report shows that policy makers can choose a path that will reduce emissions, promote economic growth, advance technology, competitiveness, and quality of life.

“Structural shifts and innovation in the global economy are opening doors to opportunity. Renewable energy prices have fallen rapidly, with global solar prices plummeting by half since 2010. More than 40 countries and another 20 sub-national regions have already put a price on carbon.

"Shifts in land use can feed another 200 million people and increase farmers’ incomes by US$40 billion per year. Better designed, compact cities can save US$3 trillion over the next 15 years while creating jobs, reducing air pollution, cutting congestion, and improving people’s lives.

“The report’s recommendations show how we can achieve better growth — with no net economic cost — and dramatically cut carbon emissions. By embracing these recommendations, world leaders can strengthen national economies and lay the foundation for greater international commitments and action ahead.”

I hope you'll get time to read WRI's report and take action with a mindset that tackling climate change is not just a necessity but, increasingly, an opportunity too. As chemical engineers we are in a unique position to deliver the environmental and economic dividends outlined so powerfully in recent times by Stern, the IPCC and WRI.