Grantham Research Institute
Grantham Research Institute
News Article | January 18, 2017
2016 was the hottest year on record, setting a new high for the third year in a row, with scientists firmly putting the blame on human activities that drive climate change. The final data for 2016 was released on Wednesday by the three key agencies – the UK Met Office and Nasa and Noaa in the US – and showed 16 of the 17 hottest years on record have been this century. Direct temperature measurements stretch back to 1880, but scientific research indicates the world was last this warm about 115,000 years ago and that the planet has not experienced such high levels of carbon dioxide in the atmosphere for 4m years. In 2016, global warming delivered scorching temperatures around the world. The resulting extreme weather means the impacts of climate change on people are coming sooner and with more ferocity than expected, according to scientists. The natural El Niño climate phenomenon, which helped ramp up temperatures to “shocking” levels in early 2016, has now waned, but carbon emissions were the major factor and will continue to drive rising heat. Gavin Schmidt, director of Nasa’s Goddard Institute for Space Studies, said: “El Niño was a factor this year, but both 2015 and 2016 would have been records even without it.” He said about 90% of the warming signal in 2016 was due to rising greenhouse gas emissions. He expects 2017 to be another extremely hot year. The new data shows the Earth has now risen about 1.1C above the levels seen before the industrial revolution, when large-scale fossil fuel burning began. This brings it perilously close to the 1.5C target included as an aim of the global climate agreement signed in Paris in December 2015. The declaration of 2016 as a year of record-breaking heat comes just ahead of the inauguration of Donald Trump as US president. Trump has called global warming a hoax and is filling his administration with climate change deniers and former ExxonMobil boss Rex Tillerson. Tillerson said recently that climate change does exist but that the ability to predict the effects of greenhouse gas emissions is “very limited”, a statement most climate scientists would reject. Trump’s team has said it will strip away funding for “politically correct environmental monitoring”. Presenting the 2016 temperature data, Derek Arndt, at Noaa, said only: “We present this assessment for the benefit of the American people.” The three temperature records are independent but reached very similar conclusions. “The datasets are all singing the same song, said Arndt. The data from Noaa showed a run of 16 successive months from May 2015 to August 2016 when the global average temperature broke or equalled previous records, while no land area experienced an annual average temperature in 2016 that was cooler than 20th-century average. Noaa also found Arctic sea ice fell to its lowest annual average extent on record and Antarctic sea ice to the second smallest extent on record. The warming in the Arctic in 2016 was “astounding”, Schmidt said. Prof Michael Mann, a climate scientist at Pennsylvania State University, said: “The spate of record-warm years that we have seen in the 21st century can only be explained by human-caused climate change. The effect of human activity on our climate is no longer subtle. It’s plain as day, as are the impacts – in the form of record floods, droughts, superstorms and wildfires – that it is having on us and our planet.” “While there may be some cost in mitigating climate change, there are already major costs in damages,” said Prof Kevin Trenberth, a scientist at the US National Center for Atmospheric Research, who estimates the costs as already tens of billions of dollars a year. “Yet if sensible approaches are implemented in the right way for [cutting emissions] and building resilience, the increases in energy efficiency can actually make it a net gain, not only for the planet for for everyone.” Bob Ward, policy director at the Grantham Research Institute on Climate Change at the London School of Economics, said: “Any politician who denies this evidence from world-class climate scientists will be wilfully turning a blind eye to rising risks that threaten the lives and livelihoods of their citizens. “I hope that president-elect Trump and his team in particular will acknowledge and act on this important scientific information.” The head of the World Meteorological Organization (WMO), Petteri Taalas, said in November: “The extra heat from the powerful El Niño event has disappeared. The heat from global warming will continue. Because of climate change, the occurrence and impact of extreme events has risen. ‘Once in a generation’ heatwaves and flooding are becoming more regular.” A WMO report said human-induced global warming had contributed to at least half the extreme weather events studied in recent years, with the risk of extreme heat increasing by 10 times in some cases. The record-smashing temperatures in 2016 led to searing heatwaves across the year: a new high of 42.7C (108.9F) was recorded in Pretoria, South Africa in January; Mae Hong Son in Thailand saw 44.6C (112.3F) on 28 April; Phalodi in India reached 51.0C (123.8F) in May, and Mitribah in Kuwait recorded 54.0C (129.2F) in July. Warm oceans saw coral mortality of up to 50% in parts of Australia’s Great Barrier Reef and bleaching of 75% of Japan’s biggest reef. The level of CO2 in the atmosphere also broke records in 2016, with May seeing the highest monthly value yet – 407.7 ppm – at Mauna Loa, in Hawaii, the site of the longest-running measurements dating back to 1958. Global carbon emissions have barely grown in the last three years, after decades of strong growth, according to an analysis published in November. The main reason is China burning less coal, but CO2 is still being emitted into the atmosphere at record levels. “CO2 will continue to rise and cause the planet to warm until emissions are cut down to near zero,” said Prof Corinne Le Quéré at the University of East Anglia. Amid fears Donald Trump’s administration will shatter decades of hard-won progress on climate change, the Guardian, Univision and Tumblr are uniting to deliver 24 hours of live coverage from around the world on what is at stake. Hours from Trump taking power, we will be reporting from all seven continents, in English and Spanish, hearing from those most affected, and finding out how we can all help protect the planet.
News Article | February 3, 2016
Like most researchers at Columbia University’s Lamont–Doherty Earth Observatory (LDEO), Park Williams is expected to win research grants to cover his salary. But times are tough for climate scientists, who face flat levels of government funding in an ever-expanding pool of competitors. Two years into a post as an assistant research professor, the 34-year-old bioclimatologist had yet to receive a single grant. But on 22 January the Center for Climate and Life, a new research centre at Columbia that is seeking to raise funds from the business community, awarded Williams US$180,000 for his research on historical drought and fire cycles. Michael Puma, an environmental modeller at Columbia and NASA’s Goddard Institute for Space Studies, received $190,000 to investigate the impact of climate change on the global food system. “I was beginning to worry about my future here and wondering if I’d be wise to begin applying for more-traditional professorships,” says Williams. “Now I’ll have time to actually do research.” With climate-science funding under perennial threat in Washington DC, Columbia is engaging corporate philanthropists to boost research into the effects of projected environmental changes and how human systems can adapt. Seeded by Columbia with an initial budget of $3.1 million over five years, the Center for Climate and Life hopes to build a $200-million endowment that disburses around $10 million annually. “It’s a very new way of funding science,” says Peter de Menocal, a palaeoclimatologist at the LDEO in Palisades, New York, who is directing the centre. The centre will supplement salaries and research costs for scientists at Columbia, as well as at NASA’s Goddard Institute for Space Studies, which is located on the Columbia campus in New York City. De Menocal says that the centre will apply the same peer-review procedures used by the US National Science Foundation to ensure that its grants are directed towards the best research proposals. With roughly 85% of scientists at the LDEO reliant on government grants for their salaries, de Menocal says, two decades of stagnant budgets for the environmental sciences have taken a toll. And Republicans in the House of Representatives, many of whom deny the reality of global warming, have attempted repeatedly to cut funding for climate-related research. De Menocal says that the funding situation has many young Earth scientists rethinking their career choice because of what he calls “a silly ideological divide”. The new institute should give them needed job security, he says, and allow the community to identify and pursue new research paths without waiting for Washington to come around. Others have also recently turned to private philanthropy to fund climate research. “It is going to be very hard for the government to undertake a really big increase in federal research,” says Margaret Leinen, director of the Scripps Institution of Oceanography in La Jolla, California. In August, Scripps opened the Center for Climate Change Impacts and Adaptation with a donation of $5 million from energy executive Richard Hertzberg and his wife Carol Dean Hertzberg. And the Grantham Foundation for the Protection of the Environment, founded by investment manager Jeremy Grantham and his wife Hannelore, has helped to establish similar research institutes at multiple universities, including the Grantham Research Institute on Climate Change at the London School of Economics. One of the Columbia centre’s initial partners is the World Surf League (WSL) in Santa Monica, California, which is the governing body of professional surfing. The organization says it seeks to promote environmental awareness among more than 120 million surfing fans around the world. As part of that partnership, Columbia plans to develop an online certificate programme focused on ocean science and conservation. The courses will be open to anybody beginning in 2017 and may evolve into a formal master’s degree programme. “We’ve got this perfect combination of science and soul,” says Scott Hargrove, chief marketing officer for the WSL, which plans to announce its funding commitment as early as February. “Surfing has the power to move culture,” he says, with Columbia driving the science and education, and surfers serving as public ambassadors. De Menocal is also in talks with French aerospace giant Airbus, which would provide the fuselage for a research aircraft that could be readily equipped with instruments to study everything from the atmosphere to rainforests and polar ice sheets. De Menocal says that the center is currently working on a viability study for the project. “We want to change the way we do and fund science,” says de Menocal, “and fast track the science we need to understand how climate impacts people.”
News Article | March 7, 2016
In November 2014, President Obama and Chinese President Xi Jinping shook hands on a historic agreement to control greenhouse gas emissions in both countries. The United States pledged to bring national emissions at least 26 percent below their 2005 levels, while China vowed to put a peak on its growing carbon dioxide emissions by the year 2030. These pledges would go on to become part of each country’s national commitments for the 2015 Paris Agreement, which was adopted during the United Nations’s climate conference in December. It seemed an ambitious set of targets at the time, particularly for China, which overtook the United States as the world’s biggest carbon dioxide emitter in 2007. Yet experts are now saying that achieving its goal is not only possible for China — the country may have already done so by the time the climate deal was made. A new paper, released Sunday night by the Grantham Research Institute on Climate Change and the Environment and the ESRC Centre for Climate Change Economics and Policy at the London School of Economics and Political Science, argues that a changing economic and energy landscape in China will help the nation’s emissions to peak by 2025 at the latest — if it didn’t already happen in 2014. The report, which will be published in the journal Climate Policy later this month, was released just two days after the Chinese government announced it would cap its annual energy consumption at 5 billion metric tons of standard coal equivalent by 2020 and reduce its carbon dioxide intensity by 18 percent between now and then. “We basically focused on trends in China’s economy generally, which affect energy demand and trends in energy supply, and used that to come up with a forecast of the trajectory of China’s carbon dioxide emissions in the energy sector over the coming decade,” said lead author Fergus Green, currently a PhD candidate at the London School of Economics and Political Science’s Department of Government. Green co-authored the paper with renowned climate economist Nicholas Stern, chair of the Grantham Research Institute, and served as Stern’s policy analyst and research adviser at the time the research was conducted. In their report, Green and Stern argue that China is now entering a “new normal,” in which a series of fundamental economic changes is beginning to take place that will help transform the country’s energy landscape and level out its greenhouse gas emissions, which are currently driven largely by the energy sector. And these changes are already beginning to take place. In the previous few decades, China’s economic model was based on high GDP growth rates and heavy investment in construction and related industries, such as steel and cement, the authors pointed out. These industries are extremely energy intensive and have relied heavily on coal-fired power stations, which produce huge amounts of greenhouse gas emissions. Between 2000 and 2013, the country’s coal consumption grew by about 8 percent each year, the report notes, nearly tripling altogether by the end of the 13-year period. The result was huge economic growth, accompanied by hefty carbon dioxide emissions. This system is not sustainable forever, the authors have pointed out. Increasing concerns over air pollution in the nation, coupled with the obvious contributions to global climate change, have made the expansion of coal environmentally untenable — and experts have suggested that the old growth model was socially and economically unsustainable as well, contributing to the rise of social inequalities associated with increasing urbanization. “We’re reaching a point in much of China where the cities have been built, the roads have been built, a lot of the demand for cement and steel is essentially slowing,” said Joanna Lewis, an associate professor of science, technology and international affairs at Georgetown University and an expert on China’s energy landscape, who was not involved with the new paper. “You can’t build indefinitely.” The authors indicate that China is now entering a new phase in which its leadership will focus on expansion of the service sector and more high-quality and innovative forms of manufacturing, while shifting away from coal-dependent, energy-intensive industries, such as steel and cement. The government began articulating these goals back in 2012, they said, and notable shifts have already begun to occur in the country. By 2014, the nation’s GDP growth rate had already fallen from double digits down to below 8 percent, and will likely continue to fall to a rate of 6 percent or lower in the coming decade. Meanwhile, in 2014, the growth of the steel and cement industries — notoriously high energy consumers — began to taper off, and production actually declined in 2015, the report says. And consequently, primary energy consumption in the country is down significantly. After growing by about 8 percent each year from 2000 to 2013, consumption grew by only 2.2 percent in 2014 and slowed even further in 2015. At the same time, China’s energy landscape has continued to diversify, the paper notes. Hydroelectric, nuclear, wind and solar power are all expanding and accounted for more than 11 percent of the nation’s primary energy consumption by the end of 2014, according to the report. And the government plans to increase the non-fossil fuel share of consumption by up to 20 percent by the year 2030, Lewis added. Perhaps most notably, coal consumption, which powered so much of China’s forward momentum in the previous decade, saw no growth in 2014 and actually declined in 2015. Altogether, the changes that have occurred so far suggest to Stern and Green that China’s emissions may, in fact, have already peaked in 2014. “In order for 2014 not to have been the peak in carbon dioxide emissions, that would require carbon dioxide to grow more than it fell last year overall, this year or in coming years,” Green said. However, China’s senior climate change envoy, Xie Zhenhua, reportedly said at a Monday press conference that the country’s emissions did not peak in 2014 and were still growing. So while China, like all countries under the terms of the Paris agreement, could have the opportunity to tighten its climate goals should its current commitments prove too easily reached, it’s uncertain for now whether the country will choose to do so. And of course, there’s still uncertainty about the factors that may cause emissions to fluctuate in the coming years. For one thing, oil and gas are still expanding in the nation, and experts aren’t sure yet how fast those industries will grow. On top of that, there are certain challenges to the integration of renewable energy on the grid, Lewis said. And, as the authors point out, there are still decisions to be made about the existing coal supply in the country, despite falling demand for coal-fired power generation. One worry is that the demand for coal conversion, or the conversion of coal into liquid or gas — an energy-intensive industry in and of itself — will increase. However, Green said the central government has already begun to take a stand on the shift away from coal and will likely maintain a sharp focus on the issue in the coming years. The government recently announced that, starting this year, it will place a moratorium on any new coal mine approvals for at least the next three years,and it’s also expected to cut down on existing coal production capacity by shuttering hundreds of existing mines this year. Altogether, considering the changes in GDP and energy supply and demand that have occurred so far, and are expected to continue through the next decade — the country’s “new normal,” in other words — Green and Stern predict a peak in carbon dioxide emissions some time between 2020 and 2025, if it hasn’t occurred already. It’s a reasonable prediction in Lewis’s eyes as well, and one that may be gaining traction among economists and energy experts. Although a 2014 peak, specifically, is far from certain, she said, “This seems to be a rising consensus — that emissions will peak earlier than had been expected and likely earlier than China had pledged in Paris.”
News Article | April 8, 2016
Lynn Scarlett, is a former deputy secretary and chief operating officer of the U.S. Department of the Interior and currently is global managing director of policy at The Nature Conservancy. Explore the Conservancy's latest thinking, science and recommendations on climate, energy and other global issues at www.nature.org/global. Scarlett contributed this article to Live Science's Expert Voices: Op-Ed & Insights. John F. Kennedy once said, "Change is the law of life. And those who look only to the past or present are certain to miss the future." While this quote may be more than 50 years old, the idea resonates for the global challenge of climate change. Looking to the present may highlight the issues at hand, but if we fail to take aggressive action now, we may not see that future. China is embracing this change as it is poised to move from leading emitter of greenhouse gasses to leader in renewable energy investments. Whether from global pressure or financial opportunity, the change is clear. The United States and China are the world's largest carbon emitters , so the 2014 agreement by U.S. President Barack Obama and Chinese President Xi Jinping to reduce their countries' greenhouse gas emissions represented a major shift in momentum for addressing the effects of climate change. Both countries committed to substantial emissions-reduction efforts over the next 10 to 15 years, with the understanding that they would continue to grow more ambitious with their efforts in the future. The pledges were fundamental to each country's national commitments for the Paris Agreement, adopted during the United Nations' 2015 climate conference and awaiting signatures this month at the United Nations in New York City. Once a minimum of 55 countries representing at least 55 percent of total global greenhouse gases sign on, the agreement will come into effect. Already 100 countries are expected to attend the U.N. meeting on Earth Day this April 22. While China vowed to put a peak on its growing carbon dioxide emissions by the year 2030, a new report from the Grantham Research Institute on Climate Change and the London School of Economics and Political Science argues that the past year brought a changing economic and energy landscape. This is because China's rapid growth, which consumed tremendous amounts of energy and produced record-setting emissions, is slowing. China's economic model over the past few decades — like that of many other developing countries — was based on heavy investment in construction and related industries, such as steel and cement, in order to expand the nation's infrastructure. Such industries are energy-intensive and in China relied heavily on coal, which produces large amounts of greenhouse gas emissions . Now that much of China's infrastructure build-out is slowing, the demand for steel, cement and other building materials is decreasing, while at the same time China is expanding energy investments in hydroelectric, nuclear, wind and solar power. In fact, the increase in China's renewable energy generation is expected be larger than energy-investment increases in the European Union, the United States and Japan combined, according to the 2013 World Energy Outlook from the International Energy Agency (IEA). These promising shifts in energy investment are not unique to China. In the United States, the Energy Information Administration suggests that in the coming year, more new solar electricity-generating capacity will come online than natural gas, wind or petroleum combined. Industries are making the transition even faster than government: American businesses made deals to acquire 3.4 gigawatts of renewable energy in 2015, nearly double the peak power generation of the Hoover Dam. Of that amount, two-thirds came from first-time buyers, according to the nonprofit Rocky Mountain Institute, a leading source on addressing climate change through market-based solutions. The most-promising trend shows older established companies — like Owens Corning, Procter & Gamble and HP — joining well-publicized new industry leaders like Amazon, Google and Ikea in making the transition toward renewable energy purchases. For example, last year, Owens Corning signed an agreement with Chicago-based Invenergy for 125 megawatts of capacity, equivalent to the power needed for 30,000 households or more, from a wind farm being built in Texas.
News Article | November 22, 2016
Natural flood defences, such as allowing trees to fall into rivers, have protected homes in Somerset from the torrential rain brought by Storm Angus. The success came as it was revealed that natural ways of cutting flood risk have no current government funding, despite ministers repeatedly backing the idea. Heavy rains saw the rivers above the village of Bossington rise rapidly on Monday, but the 100 homes placed at risk avoided flooding. The catchments of the rivers, all part of the National Trust’s Holnicote estate, had natural flood prevention measures put in place in 2013. The trust’s Nigel Hester, who managed the project, said it had been a close call but thinks the natural flood protection saved the homes. “We were hit really hard and it got very close,” he said, with water rising to within inches of the top. “I would say we were storing in excess of 20,000 cubic metres and if you added that to what was going downstream, it must have made a big difference.” The natural measures included allowing trees to fall into the rivers to slow water flow, blocking old drainage channels on the hills and using fields to temporarily store water. The project, which cost just £160,000 in capital works, cuts the flood peak by 10% and protects £30m of property. In April the results of a £500,000 tree-planting project showed it had helped the Yorkshire town of Pickering avoid last winter’s floods. A cross-party committee of MPs concluded earlier this month that natural ways of stopping floods must be a key part of protecting the nation as climate change intensifies rain storms. But freedom of information requests from Friends of the Earth revealed on Monday that there is no government funding for natural flood protection, despite the environment secretary, Andrea Leadsom, stating in late October: “I fully support natural defence initiatives such as planting trees, which can slow the flow of water.” Guy Shrubsole at Friends of the Earth, said: “Holnicote shows what can be achieved by working with nature to reduce flood risk, for very little money. Communities fearing flooding deserve better - it’s time the government’s warm words were matched with hard cash.” Daniel Johns, an official government adviser at the Committee on Climate Change, said funding could be given as soon as Wednesday, in the autumn statement. He tweeted: “Government has only allocated half of the £700m extra floods money announced in 2016 Budget … can expect autumn statement to allocate some to NFM [natural flood management].” A Defra spokesman said: “We’re committed to better protecting the country from flooding and natural flood management plays an important role in our strategy. We’re spending a record £2.5bn on flood defences to better protect 300,000 more homes by 2021 and many of these projects are already using natural flood management measures.” The government was also criticised on Tuesday after railway lines to the south-west were cut off after flash flooding, a type of flooding not considered as part of the government’s National Flood Resilience Review. Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change at the London School of Economics, said: “The review was set up to report so that immediate measures could be taken to protect infrastructure against flooding this winter. “It was originally due for publication in June but was delayed until August, leaving less time for implementation. But more importantly, the review ignored the threat from surface water flooding, against the advice of experts who were consulted.” Ben Bradshaw, the Labour MP for Exeter, said: “There have been lots of grandiose promises in recent years – following previous severe flooding and the rail line dropping into the sea in Dawlish – of investment to tackle this. Very few if any of these promises have so far come to fruition.”
News Article | March 15, 2016
February 2016 was the hottest February by far ever recorded in the history of the Earth. Climatologists blame global warming and an El Niño weather event in the Pacific for the increase in temperature in February this year. According to data released by NASA, the average global temperature in February was 1.35 degrees Celsius, or 2.4 degrees Fahrenheit, above normal for February. This margin is the biggest recorded for any month against a baseline of 1951 to 1980. "I think even the hard-core climate people are looking at this and saying: 'What on Earth?'" says David Carlson, the director of the World Climate Research Programme at the UN's World Meteorological Organization. "It's startling. It's definitely a changed planet ... It makes us nervous about the long-term impact." Many scientists have expressed their astonishment over the data released by NASA. "This result is a true shocker, and yet another reminder of the incessant long-term rise in global temperature resulting from human-produced greenhouse gases," say Jeff Masters and Bob Henson, meteorologists at Weather Underground. Professor Gavin Schmidt, director of NASA's Goddard Institute for Space Studies, also posted on Twitter regarding the temperature measurements for February 2016. The year 2014 was the hottest year for Earth and the record was shattered by 2015, which is now the hottest year recorded by scientists. Experts also believe that 2016 could break 2015's record and become the hottest year for the planet. In December 2015, 195 countries around the world agreed upon a climate deal in Paris to reduce greenhouse gas emissions to a net zero by 2100. These nations have agreed to shift from fossil fuels to greener energies like wind and solar power. The climate deal in Paris also agreed to keep global temperature increase to less than 2 degrees Celsius per year. Bob Ward, policy director at the Grantham Research Institute on Climate Change at the London School of Economics, says that the data released by NASA is very worrying for the entire planet. The data suggests that soon the planet may breach the 2 degrees Celsius target. Ward says that government organizations should take the NASA data very seriously and roll up their sleeves for cutting greenhouse emission at a faster pace. The UK Met office also confirmed that Arctic ice has hit record low, which also contributes to the increase in temperature. The previous record was January 2016 with the average temperature being 1.14 degrees Celsius above the normal January average.
Campiglio E.,Grantham Research Institute
Ecological Economics | Year: 2016
It is widely acknowledged that introducing a price on carbon represents a crucial precondition for filling the current gap in low-carbon investment. However, as this paper argues, carbon pricing in itself may not be sufficient. This is due to the existence of market failures in the process of creation and allocation of credit that may lead commercial banks - the most important source of external finance for firms - not to respond as expected to price signals. Under certain economic conditions, banks would shy away from lending to low-carbon activities even in the presence of a carbon price. This possibility calls for the implementation of additional policies not based on prices. In particular, the paper discusses the potential role of monetary policies and macroprudential financial regulation: modifying the incentives and constraints that banks face when deciding their lending strategy - through, for instance, a differentiation of reserve requirements according to the destination of lending - may fruitfully expand credit creation directed towards low-carbon sectors. This seems to be especially feasible in emerging economies, where the central banking framework usually allows for a stronger public control on credit allocation and a wider range of monetary policy instruments than the sole interest rate. © 2015 Elsevier B.V.
Zenghelis D.,Grantham Research Institute
Wiley Interdisciplinary Reviews: Climate Change | Year: 2014
Macroeconomic conditions make this a relatively favorable time to kick-start investments necessary to transition to a resource-efficient economy. There is no lack of private money, just a perceived lack of opportunity. Resource costs are low and the potential to crowd out alternative investment and employment is greatly reduced. It is often argued that the short-term macroeconomic merit of an investment, in terms of what constitutes a good economic stimulus, can be judged against established criteria. These include tests on whether an investment is timely, temporary, and targeted. Although these are important, the evidence presented here suggests that a more important criterion for a sustainable economic impact is the ability to generate private sector confidence in profitable and enduring new markets. The world is likely to transition to a resource-efficient, low-carbon economy over this century and managing this transition has early pay-offs. Clear and credible green policies have the potential restore confidence and generate growth. Providing credible early incentives to invest in resource-efficiency could generate investment and growth in the long and the short run. © 2013 John Wiley & Sons, Ltd.
Fankhauser S.,Grantham Research Institute
Wiley Interdisciplinary Reviews: Climate Change | Year: 2010
Policy interest in the cost of adaptation is growing, but compared to the mitigation literature adaptation cost research is still in its infancy. Global adaptation cost estimates from more recent studies range from around $25 billion a year to well over $100 billion by 2015-2030. The wide range is symptomatic of the poor state of knowledge. Important knowledge gaps remain both in terms of scope (whether all relevant impacts are covered) and depth (whether for a given impact all relevant adaptation options have been considered). The omissions introduce biases in both directions, upward and downward, but it is likely that adaptation costs have been underestimated so far. Adaptation is only one part of the overall response to (and therefore the costs of) climate change. The total burden of climate change consists of three elements: the costs of mitigation (reducing the extent of climate change), the costs of adaptation (reducing the impact of change), and the residual impacts that can be neither mitigated nor adapted to. The annual adaptation cost estimates reviewed here cannot be directly compared with the other two cost elements. Making this comparison would require an integrated model that takes into account the total impact of greenhouse gases over their lifetime in the atmosphere. © 2010 John Wiley & Sons, Ltd.
News Article | April 4, 2016
A sand berm created by city workers to protect houses from El Nino storms and high tides is seen at Playa Del Rey beach in Los Angeles, California on November 30, 2015 (AFP Photo/Mark Ralston) More Paris (AFP) - Trillions of dollars' worth of financial assets may be under threat from global warming's effects by 2100, climate economists warned on Monday. If warming reaches 2.5 degrees Celsius (4.5 degrees Fahrenheit) over pre-Industrial Revolution levels by 2100, investments worth some $2.5 trillion (2.2 trillion euros) may be in danger, a team reported. This was equal to half the current estimated stock market value of fossil-fuel companies. But even if the 2 C warming agreed by the world's nations in Paris last December is achieved, the value of assets at risk would be $1.7 trillion, they wrote in the journal Nature Climate Change. Climate change can destroy assets directly through sea-level rise for example, by depreciating their value, or by disrupting economic activities lower down the chain through drought or freak storms. A lot of research has focused on the oil, coal and gas investments that will be lost if the world turns its back on fossil fuels in favour of sustainable energy in line with the 2 C target. The new study attempts to break new ground with the first-ever estimate of a direct impact of climate change on the value of financial assets themselves. The projections, using mathematical models, were based on an estimated value of $143.3 trillion for global non-bank financial assets in 2013, as determined by the Financial Stability Board watchdog, the team said. At warming of 2.5 C, they wrote, some 1.8 percent of global financial assets could be at risk. But this could rise to as much as $24 trillion in worst-case-scenario warming. Scientists estimate we are on course for warming of about 4 C or more based on current greenhouse gas emission trends, or about 3 C if nations meet the emissions-curbing pledges they filed to back up the Paris climate agreement. "When we take into account the financial impacts of efforts to cut emissions, we still find the expected value of financial assets is higher in a world that limits warming to 2 C," said co-author Simon Dietz of the Grantham Research Institute on Climate Change. "This means risk-neutral investors would choose to cut emissions, and risk-averse investors would be even more keen to do so." Climate change should be an important issue for all long-term investors, such as pension funds, as well as financial regulators, added Dietz. Sabine Fuss of the Mercator Research Institute on Global Commons and Climate Change in Berlin, said it was not the final word on the topic, but the study did demonstrate that climate risks to the financial system may be substantial. "This undermines both the need for full disclosure so that climate risks can be assessed and portfolios adjusted accordingly, and the need for more research to develop comprehensive estimates of the risk of such losses," she wrote in a comment published by the same journal.