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9 May 2014

IPCC underestimates costs of carbon emissions

Future generations will pay a high price to deal with the damage due to today’s carbon emissions. The cost is expected to be considerably higher than world governments have estimated, according to Thomas Sterner, Professor of Environmental Economics at the University of Gothenburg, who has published the new findings in Nature.

Thomas Sterner has just completed an intensive work phase, as one of the main writers of the IPCC’s newly published report on steps needed to cut emissions of all the various greenhouse gases. In this work, he was obliged to follow that UN body’s strict rules of procedure. He read and pondered large numbers of scientific reports to find the lowest common denominator so that all the participating countries could ultimately agree on a conclusion.

In parallel to this work, he acted as an independent researcher. For example, he and six colleagues recently published an article in Nature, the highly regarded scientific journal. There, he presents findings that go considerably further than the IPCC report was able to do. One of the distinguishing main messages was that present-day climate models greatly underestimate the costs that future generations will have to pay in order to deal with the problems created by emissions of carbon dioxide.

Created a stir

The media coverage of both the IPCC report and the article in Nature was immense. As a result, Sterner’s voice gained a distinct profile in the media during the spring. In his everyday life, he is Professor of Environmental Economics at the University of Gothenburg and one of the researchers in Mistra Indigo, a programme devoted to such tasks as finding the best ways of designing economic control instruments to promote and strengthen climate measures in the business sector and elsewhere.

‘We chose to publish an article in Nature in close conjunction with the IPCC report since we wanted to discuss models and analyses that we think can be used to calculate a reasonable minimum level for a carbon tax.’

Key advances in the US

The article also had another clear objective: to support the US Government’s proposal of raising the ‘social cost of carbon’ in its own country to 37 dollars per tonne. This is a theoretical cost applied when American public agencies calculate the total cost of future infrastructure and energy initiatives.

Giving an exact figure for the future social costs that climate change is expected to impose is not, of course, feasible. Neither was this the researchers’ aim. Instead, they tried to specify a reasonable starting value that decision-makers could subsequently use to determine which measures are most effective for reducing greenhouse-gas emissions.

Sterner explains: ‘The US has now decided that its social cost of carbon should be 37 dollars a tonne. This is a considerable step forward, since it means that all those who invest in infrastructure or energy projects are now forced to take into account the costs that arise because of climate change. At the same time, it’s clear that they’re still a long way behind Sweden, as our carbon tax is four times higher.’

Vigorous measures needed urgently

Although the newly released IPCC report was the fifth in succession that warned of the effects of rising concentrations of greenhouse gases, emissions have increased faster in the past decade than in any of the three previous ones.

‘We must make sure the politicians start taking action within the next few years. Hopefully our model, which clarifies future costs, can contribute to change. But it’s insignificant if only Sweden does it, and hardly even makes a difference if the whole EU goes in the same direction. The best thing would be if every country in the world chose to join in, but maybe that isn’t very likely in the short term. On the other hand, it’s crucial for at least the 20 largest countries to start acting as soon as possible,’ Sterner says.

Text: Per Westergård, Vetenskapsjournalisterna

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