[People's Republic of] China, South Korea, Russia, the United States and two dozen others face potential leadership transitions this year. The prospect for economic growth and prosperity is likely to be the central determinant of these events. Not on the agenda, however, is climate change. Yet, it should be – because our growing understanding of its science and economics warns us that people’s welfare hinges on it.
Greenhouse gas emissions in the atmosphere continue to climb at alarming rates. Temperatures are breaking records around the globe. The just-released report from the Intergovernmental Panel on Climate Change makes a link between more intense rainfall and more extreme temperatures with man-made climate change.
The crucial question concerns the vast gap between the scientific knowledge and economic policies. Three matters of perception are of overriding importance.
First, economists and their clients must recognise that climate action is the means to sustaining growth. Steps to address rising sea levels, protect urban areas from flooding, and prevent declining farm yields due to changing trends, are ways of containing climate costs. By one estimate, the floods and landslides of 2010 cost China some US$18 billion.
Second, policymakers need to view climate impact as an immediate concern, not just a future one. Recent floods in Australia, China, Pakistan and Thailand, wildfires in Russia and severe droughts in China and the US show the devastation from extreme events.
Third, politicians and the public need to see that climate response is in the national interest, not only the global interest. Local benefits include reduced energy costs through efficiency gains in buildings and manufacturing, jobs in solar and wind industry, and less pollution from cleaner power plants. In the US, the country with the highest emissions per person, smarter buildings could save up to US$25 billion annually.
There are signs that the economic opportunities of tackling climate change are not being totally ignored. China, the country with the largest annual greenhouse gas emissions, envisages renewable energy accounting for at least 15 per cent of energy consumption by 2020. Meanwhile, private investment in China’s clean energy increased to over US$50 billion in 2010.
But can the worrisome trends in climate change be reversed in time? It can if economists and economic ministers see climate action as pro-growth and not antigrowth, the public recognises such action to be in support of their well-being, and political leaders take note and act with urgency.