The 1% Solution

Among the salient points of the Stern Review on the Economics of Climate Change is the estimated cost to stabilize and perhaps reverse its effects. Nicholas Stern shows costs will rise to 1% of world GDP by 2050, an enormous sum in aggregate, but one which he thinks is entirely feasible and necessary. In the first place, Stern argues that the costs of doing nothing, including a general economic decline and possible world depression, far out weigh the costs of implementing controls on greenhouse gas emissions. Secondly, the world economy will grow by approximately 200% in industrialized countries ad by 400% in developing countries by 2050, and, as Stern puts it, an "annual cost rising to 1% of GDP by 2050 poses little threat to standards of living." Moreover, Stern points out that costs of acting on controlling carbon-based emissions will increase over time, or as he says, "are likely to rise significantly as mitigation efforts become more ambitious or sudden, suggesting that efforts to reduce emissions rapidly are likely to be very costly." In other words, it's better to act now, and let the cumulative effects of technological advancement pay for themselves, than wait and try to do too little too late at a staggering cost.

There is a an enormous sense of urgency about addressing the problems of climate change. In responding to the the Stern report, British Prime Minister Tony Blair got it --- and directed a truly earned slap at recalcitrant governments, like the U.S., China, Canada and Australia:

What is not in doubt is that the scientific evidence of global warming caused by greenhouse gas emissions is now overwhelming. It is not in doubt that if the science is right, the consequences for our planet are literally disastrous . . .This disaster is not set to happen in some science fiction future many years ahead, but in our lifetime. Unless we act now . . . these consequences, disastrous as they are, will be irreversible. There is nothing more serious, more urgent, more demanding of leadership - - - here, of course, but most importantly in the global community. [Many thanks to Politique Vert for tracking down the quote.]

Unfortunately at this juncture in history, the doubters club --- among them the most important and dynamic economies in the world --- lack any sense of urgency or leadership at all, beholden to entrenched interests, domestic political or ecomomic concerns and an ideology which obfuscates the scientific evidence. In the race to the bottom in tax regimes, it's hard to see any nation stepping up to the plate and imposing a 1% cost on the economy. Fiscal conservatives will object to any new taxes on principle, and especially for a cause they reject as ideologically inspired. In any case, they will intone with a ponderous gravity suited for the high church of finance, the market is the cure. ("Climate change," says Stern, "presents a unique challenge for economics: it is the greatest example of market failure we have ever seen.") Stephen Harper might be (from our point of view) the most egregious example of denial and whitewash, but he's hardly the only one.

The irony is that Canada is in one of the best positions of any nation, economically, to act. The Canadian GDP in 2005 was $1.023 trillion, and the budget surplus last year was $13.2 billion, which works out to be 1.35% of GDP. As a nation, we have the cash to act on global climate change. There really is no excuse for our shameful "green" plan. Do we have the will? If Margaret Wente is representative, probably not. In one of the most dumb-ass things ever said by a Globe and Mail columnist ---- and that's a very long history --- she stated

Who knew the fate of Earth was up to us? And though it pains me to say this, it's not. Canada accounts for half of 1 per cent of the world's population and 2 per cent of its emissions . . . We could shut down all of Canada tomorrow, and the impact on climate change would be wholly undetectable.

Morals, ethics, responsibility, those values conservatives constantly remind the Left they're lacking, have nothing to do with it. Sad to say, this represents the attitude of our elites, or a least a significant portion of them: it won't effect us. They're right, in a way. They have a shield of power and money, just as Canada has in relation to, say, Lesotho. The trick is persuading those in power that ultimately a little altruism and leadership --- 1% to be precise --- is necessary for the safety of us all.