Costs of climate change deal would drop with truly global agreement, says report

Climate Group says full collaboration between rich and poor countries would help reduce costs of reaching carbon targets
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Monday 21 September 2009 12.02 BST
A truly global climate change deal — with full collaboration from the developed and developing world — would dramatically reduce the costs of dealing with global warming and moving to a clean energy economy, said a new study published today by the influential Climate Group.
The report said a broad-based agreement with ambitious targets for reducing greenhouse gas emissions would amplify the potential cost savings and benefits — including job creation and rise in GDP — of dealing with climate change.
Former prime minister of Britain Tony Blair launched the report yesterday ahead of UN climate change talks in New York this week.
"A climate change deal, if a genuinely global deal with everybody in it, is not just good for the environment, it's good for the economy," he said.
The report claims that such a deal could create up to 10m new jobs by 2020, stimulate additional economic growth and accelerate sustainable development in developing countries.
Costs of carbon would also drop dramatically, said the report, the more countries join a global trading agreement to help meet targets on reducing emissions.
Researchers at Cambridge found that a tonne of carbon would cost $65 for the European Union — if operating alone — to cut its emissions by 30% over 1990 levels. But if the US joined an agreement, the price of carbon would fall to $28. The carbon cost could drop much lower — to about $4 a tonne — if there were a "global green new deal" involving developed and developing countries agreed at the Copenhagen climate change meeting in December, the researchers found.
However, that agreement would have to be carefully constructed to encourage the rapid development of cleaner cars, and more efficient power stations and buildings, the report warns. Less ambitious targets would mean lower gains in terms of GDP and job creation.
The report, Cutting the Cost: the economic benefits of collaborative climate change action, used computer simulations of economic activity, energy generation and greenhouse gas emissions developed by the Cambridge centre for climate change mitigation and Cambridge Econometric to make cost estimates of a range of scenarios.
It is released at the start of a week that will be tightly focused on climate change.
The UN chief, Ban Ki-Moon, has gathered nearly 100 world leaders in New York for a summit that is aimed at getting industrialised countries to commit to deep cuts in carbon emissions, especially over the next decade.
In Pittsburgh, later this week, G20 leaders will take on the increasingly contentious issue of climate finance: how to fund the move to cleaner energy technology in developing countries as well as protect the poorest countries who are the most vulnerable to surging seas and extreme temperatures brought by climate change.
Today's report seeks to build on earlier findings from the Stern review and others that it will cost far less to act now to mitigate man-made climate change than to deal with its catastrophic consequences to try to press those leaders for action.
"The purpose of this in a sense is to say to the politicians we know you have got the will but there is also a way," Blair said.
The benefits of a truly global deal would arrive through the greater efficiencies of economies of scale, knowledge sharing, and expanded trade and markets in new technology. "The greater the range of emission reduction opportunities that can be tapped into by countries, the more low cost abatement options there are likely to be," the report said. "As developing countries ... enter the agreement so the carbon prices becomes lower still."
The models showed slight increases in GDP under all the scenarios — though the greatest gains were in the event of a global agreement. In that case, projected global GDP would register a 0.8% increase over GDP with no climate action in 2020.
There would also be more jobs created — 10 million by 2020 under a global deal compared with 1.1 million jobs if the EU acts alone.