Landmark report reveals apocalyptic cost of global warming

[Pastor Dale Morgan]

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Perilous Times and Global Warming*
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Landmark report reveals apocalyptic cost of global warming*

£3.68 trillion: The price of failing to act on climate change

Gaby Hinsliff, political editor
Sunday October 29, 2006
The Observer

Britons face the prospect of a welter of new green taxes to tackle
climate change, as the most authoritative report on global warming warns
it will cost the world up to £3.68 trillion unless it is tackled within
a decade.

The review by Sir Nicholas Stern, commissioned by the Chancellor of the
Exchequer and published tomorrow, marks a crucial point in the debate by
underlining how failure to act would trigger a catastrophic global
recession. Unchecked climate change would turn 200 million people into
refugees, the largest migration in modern history, as their homes
succumbed to drought or flood.

Stern also warns that a successor to the Kyoto agreement on cutting
greenhouse gas emissions should be signed next year, not by 2010/11 as
planned. He forecasts that the world needs to spend 1 per cent of global
GDP - equivalent to about £184bn - dealing with climate change now, or
face a bill between five and 20 times higher for damage caused by
letting it continue. Unchecked climate change could thus cost as much as
£566 for every man, woman and child now on the planet - roughly 6.5
billion people.

The 700-page report argues that an international framework on climate
change covering the globe will be necessary, and that different
countries may opt to reduce emissions differently. Options range from
many more green taxes to carbon trading.

Stern's verdict will create fierce political debate, with a growing
belief in government that taxes on activities such as driving or flying
will have to rise.

A leaked letter from the Environment Secretary, David Miliband, to the
Chancellor, in the Mail on Sunday, proposes a range of 'green' tax
increases.

Stephen Byers, the former cabinet minister and member of an expert panel
of international politicians on climate change, is meanwhile urging new
taxes to help change behaviour, including a 'global warming premium' on
exotic fruit, vegetables and flowers flown thousands of miles across the
world.

'There will need to be a global response [to Stern], but it must also
filter down to change at domestic level,' he told an audience of
businessmen in China this weekend. 'For the Labour party there must be
no no-go areas for policy debate. The politics of taxation is changing
and we need to be leading the debate, not playing catch-up. We should
consider how we can change the structure of our tax system in a way
which benefits the lowest-paid and penalises environmentally damaging
activity.'

Byers is the first of several senior Labour figures expected to go
public over green taxes, reflecting views within Downing Street that the
public now fears climate change sufficiently to pay more for
gas-guzzling activities. Charles Clarke, the former Home Secretary, is
expected to join the debate, while Alan Milburn raised the issue in a
recent speech. Such interventions will irritate the Chancellor, who
regards taxation as his turf, particularly in advance of his autumn
pre-budget report.

Air freight is one of the most lightly taxed areas of transport since
aviation fuel is tax-free and there are no passengers to pay duty. Yet
green campaigners say the planet can ill afford the thousands of 'food
miles' travelled by exotic produce. One kilo of kiwi fruit flown from
New Zealand to Europe discharges 5kg of carbon into the atmosphere.
Other options include hiking car tax on fuel-inefficient vehicles and
cutting stamp duty on the purchase of energy-efficient houses. Byers
will argue tax rises should be offset by cuts elsewhere.

The Stern report will advocate extending the European 'cap and trade'
system - under which carbon emissions are capped at a certain level,
with businesses which need to emit more forced to buy spare emissions
quotas from low-polluting businesses around the world, encouraging
industry to find cleaner and cheaper ways of operating.

He will also urge a doubling of investment in energy research and a
speedier Kyoto process - meaning that negotiations with the US will have
to be undertaken while George Bush is still president. International
governments had hoped to deal with a more sympathetic successor after 2008.

Downing Street and the Treasury believe that the report marks a decisive
moment in international politics. Stern's is the first heavyweight
contribution by an economist rather than a scientist and senior
officials believe he will make what might seem a hopelessly ambitious
timetable credible. 'This will give us an argument to make,' said a
Whitehall source. 'I think we are at a tipping point in terms of the
debate, as we were at a tipping point in 2004/05 in terms of the science.'

Stern's forecast cost of 1 per cent of global GDP is roughly the same
amount as is spent worldwide on advertising, and half what the World
Bank estimates a full-blown flu pandemic would cost. Without early
intervention, he estimates the cost would be 5-20 per cent of GDP, some
paid by governments, some by the private sector. But he stresses that
unilateral action will not be enough - if Britain shut down all its
power stations tomorrow, the reduction in global emissions would be
cancelled out within 13 months by rising emissions from China.

Stern will advocate new funds to help Africa and developing nations
adapt, but will argue the key challenge is from emerging nations such as
China and India. Emissions from China are nearly level with the US and
likely to increase as the Chinese get more cars and electrical goods -
up to 30 million households are likely to get digital TVs alone in the
next few years. Britain will push this week for more energy-efficient
consumer goods.

The Tory environment spokesman, Peter Ainsworth, who has argued green
tax should rise as a proportion of overall taxation, said he hoped the
Stern report 'spurs the government into being much more proactive than
it has been'.

Britain's share of revenue from green taxes is lower now than in 1994,
partly because of the freezing of petrol duty after fuel protests.

Green taxes are controversial because if they do change behaviour, tax
income falls, emptying Treasury coffers. But supporters argue that, over
time, the tax system could be shifted back towards more personal taxation.