By Christian de Perthuis
Christian de Perthuis is professor of economics at Dauphine University in Paris, and Director of the Climate Economics Chair, a think-tank focusing on shaping economics to fight agains climate change. He is also a member of the Livelihoods Advisory Board. The short text that follows is the English translation of a lecture he made at the French Academy of Moral Sciences and Politics – to which the original transcript in French can be found here Adaptation to Climate Change.
In this lecture Christian raises the often neglected issue of adaptation to climate change, not just mitigation. Until fairly recently the international debate on climate change was very much focused on mitigating greenhouse gas emissions. Now that it is obvious that action against climate change will not be sufficient to avoid a certain degree of change to the climate as we know it, adaptation has emerged as a hot debate. As Christian points out, adaptation is not only an issue for poorer countries, but is also a great threat to richer economies. Enjoy the read.
The easiest way to express the economic issues on climate is to proceed in two steps: first diagnose what we know about climate change and its implications, then, how we can drive the action.
As an introduction, let me present a feedback from experience. Last fall, I was asked to chair, on behalf of the Minister of the Environment and Sustainable Development, a working group on “2020-2050 path to a low carbon economy.” To conduct this study, we auditioned, among others, our German colleagues. It appeared that the German leaders of climate and energy policies have clearly integrated action on climate change and energy as a lever for economic growth to build a new economy based on new systems of networks for production, consumption and distribution.
In France, climate change has now completely disappeared from public debate. The challenges we face do not seem to be of interest to candidates who speak in the media. This reflects a representation that has become dominant in the political and economic decision: short-term economic problems are so numerous that we must first try to solve them before to turn to tackling climate change.
Would it be possible to integrate climate change into decision making in economic and public policy as a lever for economic recovery, industrial recovery, reconstruction, development of new systems generating investment and growth? This is the point of view I would like to discuss with you.
I – Diagnostics: what we know about climate change
Let’s first take stock of what the scientific community tells us about climate change by distinguishing clearly what constitutes the facts of observation and what is part of the analysis and anticipation.
Facts of observations
1) The concentration of greenhouse gases in the atmosphere is growing extremely fast since the beginning of the industrial era. There were 280 ppm (parts per million) of CO2 in the atmosphere in the early twentieth century, and today there are 385 ppm and there is an increase of about 20 ppm per year. This increased concentration of greenhouse gas emissions come from man-made emissions. All scientists agree.
2) The planet is experiencing an average warming of just under one degree Celsius since the beginning of the twentieth century. Three quarters of this warming has occurred since 1970. It is unevenly distributed in time and geography. The oceans are tremendous temperature regulators, temperature rise is much sharper on continents than in ocean waters. Furthermore, the warming is more intense as we approach the higher latitudes. This is why the measurements of warming in the Arctic Ocean indicate 4 or 4.5 degree.
3) The sea level is rising but not consistently, contrary to what common sense might suggest. Anyway, it should be noted that the observed rise in sea level is faster than all predictions that have been made.
4) The water cycle is disrupted by climate change because it induces disruptions in rainfall patterns and partial melting of the permanent snow cover and glaciers; this changes the regulatory mechanisms of large rivers. This is true in Europe with the Alpine rivers; this is also true, but with dramatic dimensions, in Asia, where all major rivers originate in the Himalayas.
5) Extreme events seem to multiply and although it is difficult to assess this phenomenon, one must wonder if global warming affects the formation of tropical storms and, in particular, regimes of monsoons in Asia.
The scenarios: the inertia and complexity of the climate system
Having made these observations, we should try to understand and anticipate the mechanisms of global warming. At the heart of the problem, there is the question, fundamental for economists, of uncertainty. It is known that the degree of concentration of greenhouse gases and global warming are two related phenomena. But climate models cannot currently describe with sufficient accuracy the causal mechanisms that would allow the ability to anticipate future climate based on emissions of greenhouse gases today.
Climatologists are still two observations.
First, the climate system presents a tremendous inertia. Thus, one ton of CO2 released into the atmosphere stays there 100 years. This means that the choice to, or not to, release CO2 today in the atmosphere modifies the climate of our grandchildren and our great-grandchildren. This phenomenon of time lag between cause and effect often pushes policymakers to consider that we have time since this is a long term problem. In fact, the more we delay the choices we should do now, the less manageable the situation for our children.
Second, there are probably irreversible phenomena in climate change. Thus, if the fresh water ice-trapped in Greenland melts completely, this will result in a sea level rise of 7 meters – and it is inconceivable, at present, how the sea level could decline afterwards.
Two systems to be rebuilt: the energy and agriculture and forestry
What are the sources of emissions of greenhouse gases? Keep in mind that the emissions of greenhouse gas come from the organization of two major systems at the base of our societies.
The first system is the energy system. 80% of primary energy used in the energy system is of fossil origin. Under current technology, each time we use a fossil fuel – coal, gas or oil – we emit greenhouse gases. Therefore, the goal of halving emissions by 2050 worldwide, as advocated by most scientists, involves reconstructing the energy system in terms of the offer, demand and distribution. The energy system is the source of about two thirds of total greenhouse gas emissions.
The second system is that of land use to produce food and maintain – or not to – forests. This agroforestry system represents a third of greenhouse gases emissions. Contrary to a simplistic view, the question of the forest is closely related to the agricultural issue. Of course, deforesting is related to logging, but 90% of deforestation is due to food pressure, to an increasing demand in meat proteins, primarily in the rapidly developing Asian countries, China and India. I am convinced that over the coming years, the issue of agriculture and forestry will become a central element of the debate on climate change. But the solutions are complex. The reason is easily understandable: in France alone, there are 600,000 agricultural production units. This helps to imagine how many there are in a country like India. As a result, the mode of intervention for the reorientation of agricultural practices is necessarily complex.
The treatment of uncertainty
In France, more than elsewhere, the debate on climate change is dealt with on a relatively polemical and confrontational manner. It seems to me that many of the false controversies that arise stem from the issue of uncertainty. This uncertainty is understandable if one considers three levels.
1) The global scenarios of climate change in the future are very uncertain. We do not know in fact how the global climate system will react to the enormous impact that of releasing massive amounts of greenhouse gases in the atmosphere. For example, I will talk about water vapor, the first greenhouse gas in the atmosphere. If the climate warms, plants “breathe” more and send more water vapor in the atmosphere, which adds up to the issue to the extent that steam just adds up to the greenhouse gases already present. But when it then turns into clouds, the same water vapor blocks the sunlight and counteracts the previous effect. And scientists do not know how to explain the cloud formation of and do not know with certainty whether the increase of water vapor in the atmosphere eventually increases or decreases warming.
2) To operationally manage adaptation to climate change impacts, these impacts must be known accurately. For example, it would be good to know the impact of climate change in Lyon, at the junction of the Mediterranean system and temperate system. However, climate models today are not able to predict the type of impact that will affect the Lyon region.
3) What is the adaptive capacity of social and economic systems? Much has been studied and said about how ecosystems can adapt to climate change, but no one knows if this would apply to our social systems.
II – The ways of action on climate change
The conduct of the action on climate change must combine three types of instruments, three types of interventions: adaptation to the impacts, mobilization of research and development, emissions reduction.
Adaptation to climate change impacts
We must, first, adapt to climate change. This will, in large part, happen spontaneously. But we should also think about how we can integrate the outlook of climate change in the choice of infrastructure and spatial planning. Today, when building a bridge, a highway or another infrastructure, of course we integrate the phenomena of climate change. But this is done by taking historical averages, that is to say that the new infrastructure adapted to yesterday’s climate and not tomorrow’s.
We should also better think about land use and spatial planning. It is obvious that if, as expected, the sea level rises one meter by the end of this century, this will pose serious problems in many coastal areas. If tomorrow heat waves occur, as has been the case in the past, but with a few more degrees, it goes without saying that our current cities there will not be prepared.
Finally, longer term we must anticipate a certain number of migration flows that are in some cases a form of adaptation.
Stimulating research and development
Second, adaptation to climate change must immediately integrate innovation, research and development. Innovation and research and development will be a part of the solution. But let me warn against a simplistic vision of what is called geo-engineering. The geo-engineering techniques are meant to influence the functioning of the climate system, either by preventing some of the sunlight from reaching the Earth’s surface (by sending sulfur into the atmosphere or using geostationary mirrors), or by artificially increasing the storage capacity of carbon and greenhouse gas emissions on the ground or in the ocean. It could help to address climate change, but I doubt that they can provide by themselves a radical and unique solution.
Reducing emissions of greenhouse gases
Third, action against climate change necessarily entails preventive actions at a very large scale to limit our emissions of greenhouse gases and to make a transition to a low carbon economy, that is to say towards an economy in which in 2050, we will issue less than half the greenhouse gases we emitted in 1990. Mankind currently emits in the world about 50 billion tons of CO2 equivalent each year. The amount of emissions is increasing very rapidly in emerging countries and in some industrialized countries. It tends to decrease slightly in Europe.
Most climatologists agree that if one wants to limit irreversible phenomena, such as that of the melting of the Greenland ice, the goal should be an average temperature rise not exceeding 2 degrees Celsius which means to reduce the 50 billion tons to about 15 only.
How can we consider such a development? I am convinced that we will not have fully integrated the issue of climate change in our decision making as long as we have not included the value of carbon, that is to say its price, in the functioning of the economy. This means that each emitter of greenhouse gases will have to pay the price of its emissions, except that it’s hard to fix this price for the simple reason that it must be that the future cost of damage which is very difficult to assess. But this uncertainty, rather than paralyze the action should instead encourage to act without delay.
Regarding the price of carbon and reducing emissions at the international level, a first draft was made in 1992, at the Convention of Rio de Janeiro, and then in 1997 with the Kyoto Protocol. The results were very moderate because in fact we made the mistake to divide the world into two and to put a price on carbon in industrialized countries only. Emerging countries were waived the obligation to participate in a collective action. Now it is possible to have a different understanding of the principle of “common but differentiated responsibilities” which was officially recorded in 1992 in the Climate Convention.
In 2011, the Durban conference on climate change ended with a compromise very disappointing in the short term, but which aims to create conditions for an international agreement that includes not only the industrialized countries, but also the major emerging countries, China, India, Brazil …
One consequence of the Kyoto Protocol was the creation in Europe of a very innovative tool: a European trading CO2, or carbon market. In this system, manufacturers from 27 countries, via a mechanism of cap and trade, must now pay for their emissions of greenhouse gases. This system has experienced major governance difficulties, but it works and we are envied. I’ve been asked twice by the U.S. Senate to lecture about it.
Regarding strictly France, you must know that 75% of our emissions of greenhouse gases are due, not to the industry, but transport, agriculture and buildings. Those emissions mainly depend on our national policies. My recommendation is that we include in our discussions the idea that there could be a carbon price in Europe even outside of what is under the cap-and-trade scope. Can we argue that this would be an unbearable weight for our economy? Everything depends on how the proceeds of this tax are redistributed back into the economy.
To that respect there’s been several interesting experiments in Europe. I cite the example of Sweden, where you pay today per ton of CO2 around 120 euros when you’re a household or in areas not directly subject to international competition such as buildings or transportation. The proceeds are then injected into the Swedish economy. Statistics on industrial and macroeconomic performance of Sweden, since 1990, within the OECD, show that in terms of GDP growth and employment, the country ranks second, just after Korea.
This confirms that in preparing a transition to a low carbon economy, it is necessary to introduce the carbon value in the economic system by pricing emissions of greenhouse gases. It may even be a factor for growth, competitiveness and job creation. It seems to me that extending the pricing of carbon inside the French and European economies needs to be carefully considered in the context of economic and financial crisis we are experiencing.