The Economics of Climate Change: The Stern Review By Nicholas Stern

Stern Report Press Review

Responses to the Stern Review

"If the world is waiting for a calm, reasonable, carefully argued approach to climate change, Nick Stern and his team have produced one. They outline a feasible adjustment policy at tolerable cost beginning now. Sooner is much better."

Robert M. Solow

Nobel Prize economist 1987

"The Stern report shows us, with utmost clarity, while allowing fully for all the uncertainties, what global warming is going to mean; and what can and should be done to reduce it. It provides numbers for the economic impact, and for the necessary economic policies. It deserves the widest circulation. I wish it the greatest possible impact. Governments have a clear and immediate duty to accept the challenge it represents."

James Mirrlees

Nobel Prize economist 1996

"The stark prospects of climate change and its mounting economic and human costs are clearly brought out in this searching investigation. What is particularly striking is the identification of ways and means of sharply minimizing these penalties through acting right now, rather than waiting for our lives to be overrun by rapidly advancing adversities. The world would be foolish to neglect this strong but strictly time-bound practical message."

Amartya Sen

Nobel Prize economist 1998

"The Stern Review of the Economics of Climate Change provides the most thorough and rigorous analysis to date of the costs and risks of climate change, and the costs and risks of reducing emissions. It makes clear that the question is not whether we can afford to act, but whether we can afford not to act. To be sure, there are uncertainties, but what it makes clear is that the downside uncertainties-aggravated by the complex dynamics of long delays, complex interactions, and strong non-linearities-make a compelling case for action. And it provides a comprehensive agenda-one which is economically and politically feasible-behind which the entire world can unite in addressing this most important threat to our future well being."

Joseph Stiglitz

Nobel Prize economist 2001

"The Bank is committed to addressing the dangers of climate change and has made substantial progress in developing an Investment Framework for Clean Energy And Development. I very much welcome the Stern Review which provides a much needed critical economic analysis of the issues associated with climate change, and complements the recent IEA technology assessment and the World Bank's Clean Energy Investment Framework paper. The Bank is today working closely with its clients and partners to turn our analysis into practice, and will seek to substantially increase its own investment flows and those of the private sector.

A crucial next step is to involve the private sector in the EIF. I am therefore pleased to support a partnership between the World Bank and the World Economic Forum and the World Business Council on Sustainable Development to stimulate private sector investment through the Energy Investment Framework. Chancellor Gordon Brown and I will co-host a conference early next year to launch the partnership. "

Paul Wolfowitz

President of the World Bank

"The Stern Review of the Economics of Climate Change is a vital step forward in securing an effective global policy on climate change. Led by one of the world's top economists, the Stern Review shows convincingly that the benefits of early global action to mitigate climate change will be far lower than the costs. The report establishes realistic guidelines for action (based on long-term stabilization ceilings for greenhouse gases), core elements of an effective global policy (carbon pricing, technology policy, and removing barriers to change), and a framework for international cooperation that must include all regions of the world, both developed and developing. The Stern Review will play an important role in helping the world to agree on a sensible post-Kyoto policy."

Prof. Jeffrey D. Sachs

Director of the Earth Institute at Columbia University

Special Advisor to UN Secretary General Kofi Annan

"The Economics of Climate Change sends a very important and timely message: that the benefits of strong, early action on climate change outweigh the costs. That conclusion is one that the International Energy Agency fully endorses - notably in its World Energy Outlook 2006 to be published next week. Congratulations to Sir Nick Stern and his team for producing a landmark review which I have no doubt will strengthen the political will to change of governments around the world."

Claude Mandil

Executive Director of the International Energy Agency

"Climate change can impose enormous costs on mankind and particularly on the innocent poor people. The uncertainty that is used as an excuse not to act works both ways. If the impact is larger than expected it could be catastrophic. Sir Nick Sterns report is valuable as it shows the need to act now and that the costs of action are modest. One hopes it will spur to action those who are responsible for creating this threat."

Kirit Parikh Member, Planning Commission, Government of India

"The scientific evidence of global warming is overwhelming but some commentators and lobby groups have continued to oppose offsetting actions on economic and competitiveness grounds. This comprehensive and authoritative report demolishes their arguments, explaining clearly the complex economics of climate change. It makes plain that we can cut emissions radically at a cost to the economy far less than the economic and human welfare costs which climate change could impose "

Adair Turner

Former Director of UK Confederation of British Industry and Economic Advisor to Sustainable Development Commission

"When the history of the world's response to climate change is written, the Stern Review will be recognized as a turning point.

Sir Nicholas and his team have provided important intellectual leadership as humanity engages with its greatest challenge.

While the details will be debated, the main thrust of the report is clear and compelling - the expected benefits of tackling climate change far outweigh the expected costs."

Cameron Hepburn

Oxford University

"I support the Stern Review's conclusion that there is a strong economic case for taking early, effective action to reduce greenhouse gas emissions. This clearly has important implications for transport policy, which my own study is taking into account - sustainable economic growth cannot be achieved in any sector without tackling the effects of our actions on the environment".

Sir Rod Eddington

Adviser to the UK Government on the long term links between transport and economic growth, and former Chief Executive of British Airways

Web site to consult full text Stern Report

Stern Report

Consult also
Combustion in the RainForest: Ecology, Energy, and Economy for a Sustainable Environment

Stern review offers counsel of hope

Published: October 30 2006

The science on global warming is now incontrovertible: the climate is changing, man is helping to make that happen, and the damage could be irreversible. But the contest over the economics of what to do about this is open, or at least was until the UK government published its big study chaired by Sir Nicholas Stern. This report rebuts any fatalistic notion that the world would do better to spend its economic resources just adapting to inevitable climate change, a counsel of despair. Instead, the Stern review suggests that the economic benefits of early action to curb greenhouse gases would far outweigh the costs - by eventually as much as $2.5 trillion a year.

So for the first time we have, spelt out in copious detail over some 600 pages, an economic rationale for action on climate change. It bills itself somewhat optimistically as "a pro-growth strategy", when in fact it is more a strategy to protect growth from the catastrophic fall it could eventually suffer from higher temperatures around the world. But the report will serve a valuable purpose if it can convince the US, China and India - the three big economies that lie outside the Kyoto protocol on climate change - that growth is compatible with international action to cut carbon emissions. It is by its effect on these three countries particularly that the Stern review must finally be judged.

Key to the Stern review is a relatively pessimistic assumption of eventual climate change damage on unchanged policies, and a relatively optimistic view of what early investment to mitigate climate chance can achieve. On the former, it is gloomier than most previous studies because it differs from them in assuming the possibility of a higher temperature rise (based on more recent data); in incorporating harder-to-measure impacts such as declining human health; and in adding in negative feedback such as melting ice caps releasing methane. As a result, it suggests that the eventual reduction in world gross domestic product could be anywhere from five to 20 per cent a year. However, this is just an estimate of the present value of possible climate damage far into the future, and is an average that could conceal a far greater impact on certain countries, particularly poorer, developing ones.

On the issue of mitigation costs, the review comes up with a relatively modest figure of one per cent of world GDP that would, it believes, stabilise carbon dioxide emissions at 550 parts per million. The relative caution in this estimate lies, in part, in assumptions that much can be done with relatively little economic pain: for instance, improving energy efficiency, halting deforestation and "decarbonising" the power sector.

One per cent of GDP is not a heavy price for the world to pay, just the equivalent of a one per cent rise in its price level. But stabilising emissions at 550ppm - twice the level of the pre-industrial world - might not be enough to ward off serious damage. So the Stern review admits that mitigation costs could rise as 3.5 per cent of GDP.

Crucially, keeping mitigation costs as low as one per cent of GDP depends on the world agreeing to cut emissions far quicker and faster than at present. And here is the rub. For amid all the uncertainty about climate change one thing we know is it will take a very uneven toll on the nations of the world, and that the poorer developing countries will suffer most. One reason why the US, or at least the Bush administration, remains infuriatingly relaxed about climate change is that the US mainland is likely to remain relatively untouched by rising sea levels.

For their part, the big developing countries may concede the problem, but they have immediate priorities of poverty to deal with. Moreover, they can argue that it is the industrialised countries that got the world into this mess, and must get it out of that mess. Indeed. But while the industrialised world must set a lead, in the end developing counties must accept the need to follow. For as Tony Blair, the prime minister, points out, if Britain were to cease all its emissions overnight, the beneficial effect for the planet would be wiped out just by the growth in China's emissions in two years.

How can more countries be persuaded to join in fighting climate change?

First, they must accept a responsibility to act, but be allowed to choose their actions from a mix of taxes or the trading of permits. The latter has been pioneered by the European Union, but its current emissions trading scheme is in disarray. It needs to be fixed, and extended to other countries. Second, urgent negotiations are needed to prolong the Kyoto protocol beyond 2012; investors require the certainty of a longer term framework if they are to sink their money in low- carbon capital equipment that may last decades. Third, the Kyoto signatories need to secure firm commitments from big polluters outside that protocol.

Kyoto took five years to negotiate. But the world, and its atmosphere, cannot afford to wait that long again. The Stern review is not only a counsel of hope, it is a necessary call for action.

The Financial Times Limited 2006

Thomas Wagner, Associated Press

Published: Monday, October 30, 2006

LONDON -- Unchecked global warming will devastate the world economy on the scale of the world wars and the Great Depression, a British government report said Monday, as the country launched a bid to convince doubters that environmentalism and economic growth can coincide.

Britain hired former Vice President Al Gore, who has emerged as a powerful environmental spokesman since his defeat in the 2000 presidential election, to advise the government on climate change -- a clear indication of Prime Minister Tony Blair's dissatisfaction with current U.S. policy.

Blair, President Bush's top ally in the Iraq war, said unabated climate change would eventually cost the world between 5 percent and 20 percent of global gross domestic product each year. He called for "bold and decisive action" to cut carbon emissions and stem the worst of the temperature rise.

"It is not in doubt that, if the science is right, the consequences for our planet are literally disastrous," he said. "This disaster is not set to happen in some science fiction future many years ahead, but in our lifetime."

The report emphasized that global warming can only be fought with the cooperation of major countries such as the United States and China, and represents a huge contrast to the Bush administration's wait-and-see global warming policies.

Sir Nicholas Stern, the senior government economist who wrote the report, said that acting now to cut greenhouse gas emissions would cost about 1 percent of global GDP each year. He recommended a "low-carbon global economy" through measures including taxation, regulation of greenhouse gas emissions and carbon trading.

"That is manageable," he said. "We can grow and be green."

Bush kept America -- by far the biggest emitter of carbon dioxide and other gases blamed for global warming -- out of the Kyoto international treaty to reduce greenhouse gases, saying the pact would harm the U.S. economy. The international agreement was reached in Kyoto, Japan, in 1997 and expires in 2012.

Blair made his displeasure with U.S. environmental policy clear when he signed an agreement this year with California Gov. Arnold Schwarzenegger to develop new technologies to combat the problem. The measure imposed the first emissions cap in the United States on utilities, refineries and manufacturing plants in a bid to curb the gases that scientists blame for warming the Earth.

The prime minister and the report also said that no matter what Britain, the United States and Japan do, the battle against global warming cannot succeed without deciding when and how to control the greenhouse gas emissions by such fast-industrializing giants as China and India.

Stern's 700-page report said evidence showed "that ignoring climate change will eventually damage economic growth."

"Our actions over the coming decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century," he said.

The report said at current trends average global temperatures will rise by 3.6 to 5.4 degrees within the next 50 years or so, and the earth will experience several degrees more of warming if emissions continue to grow.

It said such warming could have effects such as melting glaciers, rising sea levels, declining crop yields, drinking water shortages, higher death tolls from malnutrition and heat stress, and widespread outbreaks of malaria and dengue fever. Developing countries often would be the hardest hit.

The report acknowledged that its predictions regarding GDP relied on sparse data about high temperatures and developing countries, and placed monetary values on human health and the environment, "which is conceptually, ethically and empirically very difficult."

Treasury Chief Gordon Brown, who is expected to replace Blair as prime minister next year, said Britain would lead the international effort against climate change, establishing "an economy that is both pro-growth and pro-green." He called for Europe to cut its carbon emissions by 30 percent by 2020 and 60 percent by 2050 -- and Blair's government on Monday said it would propose a British law to that effect.

Under the 1997 Kyoto accord, 35 industrialized nations committed to reducing emissions by an average 5 percent below 1990 levels by 2012.

But Britain is one of only a handful of industrialized nations whose greenhouse gas emissions have fallen in the last decade and a half, the United Nations said Monday.

The U.N. said Germany's emissions dropped 17 percent between 1990 and 2004, Britain's by 14 percent and France's by almost 1 percent.

Overall, there was a 2.4 percent rise in emissions by 41 industrialized nations from 2000 to 2004, mostly because former Soviet-bloc countries, whose emissions declined in their economic downturn of the 1990s, increased emissions during the recent four-year period by 4.1 percent.

The British government is considering new "green taxes" on cheap airline flights, fuel and high-emission vehicles.

© Associated Press 2006

Octubre 31 de 2006

Alertan sobre gigantesco impacto económico del calentamiento global

El fenómeno puede costar al mundo más que la Primera o la Segunda Guerra Mundial, o despertar una crisis equivalente a la gran depresión de 1930.

El primer ministro británico Tony Blair advirtió que el mundo sufrirá consecuencias "catastróficas" si no actúa de manera urgente para combatir el problema.

El informe de 700 páginas, encargado por el ministro de Finanzas británico, Gordon Brown, y dirigido por el ex economista jefe del Banco Mundial Nicholas Stern, estima que el costo de no hacer nada será de 7 billones de dólares (5,48 billones de euros).

"Los riesgos son muy grandes y a menos que actuemos para reducirlos, será muy difícil lidiar con ellos", advirtió Stern en una entrevista con la BBC, antes de la publicación del informe.

El economista llamó a la comunidad internacional a asumir su responsabilidad e indicó que los países ricos deben pagar más que los pobres para compensar sus mayores niveles de emisión de dióxido de carbono (CO2).

"Los países pobres sufrirán el impacto antes y de manera más dura (...) Lo correcto es que los países ricos paguen un poco más", afirmó.

Si no se adoptan medidas, la temperatura subirá unos cinco grados centígrados en los próximos 100 años, advirtió.

Ocho veces más grave que el huracán 'Katrina'

Comparó su impacto con el efecto del huracán Katrina en Estados Unidos el año pasado pero "intensificado muchas veces", así como con la ola de calor registrada en Europa en 2003.

El número de refugiados víctimas de la sequía o de inundaciones podría llegar a unos 200 millones de personas, añade el estudio.

Blair escribió en el tabloide 'The Sun' que el trabajo de Stern "es el informe más importante sobre el futuro que he recibido desde que soy Primer Ministro".

Sus conclusiones, afirmó, son inequívocas. "Nos encaminamos hacia momentos claves catastróficos en nuestro clima, a menos que actuemos", sentenció.

"La pieza final del puzzle es convencer a cada líder político, incluidos aquellos de Estados Unidos, China e India, que esto debe ser la prioridad de nuestra agenda", añadió.

El informe también indica que Brown ha designado al ex vicepresidente estadounidense Al Gore como su "gurú verde".

Gore es autor de un reciente documental sobre los efectos del cambio climático, titulado "Una verdad incómoda" ("An inconvenient truth").

¿Habrá impuestos para proteger el ambiente?

Se espera que el informe desate la polémica en Gran Bretaña sobre si el gobierno de Blair debe implementar más impuestos para proteger el ambiente.

En respuesta a informaciones de prensa de que el gobierno subirá los impuestos a las camionetas 4x4 o a los pasajes de avión baratos, un titular del tabloide The Sun junto a la columna de Blair leía "Yo estoy salvando el mundo, ustedes lo están pagando".

El secretario de Medio Ambiente, David Miliband, anunció el domingo que el gobierno estudia aplicar impuestos para enfrentar el problema, pero no dio más detalles.

El diario The Observer publicó el domingo extractos del informe e indicó que combatir el cambio climático costaría un 1 por ciento del PIB mundial.

Stern hizo también un llamado para que un nuevo tratado reemplace al Protocolo de Kyoto el año próximo, y no en 2010 ó 2011 como está previsto, porque el problema es urgente.

Su informe es considerado como la primera contribución de peso al debate sobre el cambio climático desde el punto de vista de un economista, y no de un científico.

Ha sido saludado por la ONG de defensa del medio ambiente Greenpeace, que estimó que el informe despeja toda duda sobre la urgencia de enfrentar el cambio climático.

"Si queremos evitar una catástrofe, debe haber un costo real para emitir dióxido de carbono y eso significa impuestos más altos a volar y a lo que consuma combustible en grandes cantidades. Es nuestra deuda con las futuras generaciones", indicó un portavoz de Greenpeace.





Planète : le réchauffement coûtera très cher

Pour Tony Blair, "il n'a rien de plus grave, rien de plus urgent, rien qui exige plus de décisions".

Les scientifiques lancent régulièrement un cri d'alarme sur les effets négatifs du réchauffement de la planète. Cette fois, c'est un économiste de renom qui s'inquiète de l'augmentation des émissions de gaz à effet de serre. Si rien n'est fait pour les limiter, l'économie mondiale sera tellement pénalisée qu'elle entrera en récession.

C'est un ancien économiste de la Banque mondiale, Nicholas Stern, qui publie le premier rapport sur les effets économiques des changements climatiques. Et si d'habitude le rôle d'agitateur est dévolu au milieu scientifique, cette fois, c'est un spécialiste de l'économie mondiale qui veut alerter. Pour Nicholas Stern, si rien n'est fait pour contrer le phénomène du réchauffement, l'économie mondiale en souffrira. Elle connaitra une récession "d'une ampleur catastrophique". Le coût de ces conséquences est estimé à 5 500 milliards d'euros. S'il n'est pas endigué, le réchauffement climatique va entraîner un "ralentissement très grave" de l'économie mondiale.

L'ancien économiste en chef de la Banque mondiale, l'une des institutions les plus au fait de la marche du monde, avait été mandaté en 2005 par le gouvernement britannique pour évaluer les conséquences du réchauffement de la planète d'ici un siècle. Pour montrer l'importance qu'il accordait à ce rapport, le Premier ministre Tony Blair était d'ailleurs aux côtés de Nicholas Stern lorsqu'il a présenté son étude.

"Il ne fait pas de doute que les preuves scientifiques du réchauffement climatique provoqué par les émissions de gaz à effet de serre sont désormais écrasantes", a déclaré le chef du gouvernement britannique à l'occasion de cette présentation. " Et il ne fait pas de doute que les conséquences pour notre planète sont littéralement désastreuses…Il n'y a rien de plus grave, rien de plus urgent, rien qui n'exige plus de décisions", a encore lancé Tony Blair.

Un tandem pour une grande cause

Le tandem à la recherche de l'électrochoc mondial est donc constitué d'un économiste de renom et du responsable, depuis plusieurs mandats, de la politique économique et sociale d'un pays industrialisé en bonne santé. C'est après le G8 de Gleneagles que Tony Blair s'est investi dans cette question du réchauffement. Les pays industrialisés, y compris les Etats-Unis, plus la Russie, semblaient prêts à se mobiliser.

Cette fois, l'alerte n'est pas basée sur des inquiétudes alimentées par des études scientifiques, mais sur les craintes de deux acteurs économiques. Car Nicholas Stern sort cette question de l'environnement pour l'aborder par la croissance et le Produit intérieur brut. "Si nous ne prenons pas de mesure pour mettre les émissions sous contrôle, chaque tonne de CO2 que nous émettons aujourd'hui provoquera un dommage à l'économie d'au moins 85 dollars", affirme l'économiste. En évaluant les dommages en milliards de dollars (6 800), il cherche à sensibiliser gouvernements et décideurs. Et il utilise des images : les effets du réchauffement de la planète sur l'économie mondiale pourraient être "comparables aux effets dévastateurs des deux guerres mondiales et à la dépression des années 30".

Nicholas Stern, comme nombre de scientifiques avant lui, a bien noté la vertigineuse augmentation des gaz à effet de serre dans l'atmosphère. Cette augmentation, on le sait, modifie les climats des différentes régions du monde. Qu'un économiste et un chef de gouvernement s'emparent du débat et il sort des laboratoires de climatologie. Cependant, aussi bien pour le constat que pour les solutions, le rapport Stern n'apporte rien de neuf. Hausse des températures du globe, montée des océans, catastrophes naturelles plus accentuées, changements des régimes des pluies, climats plus tempérés vers les pôles : tout cela est déjà connu, même si jusqu'à présent les sceptiques semblaient l'emporter.

Toujours à la recherche de solutions

Pour les solutions, le rapport Stern n'invente rien non plus. Il reprend les mécanismes longuement négociés dans le cadre de la Convention climat et de son outil de mise en oeuvre, le Protocole de Kyoto. Marché du carbone, taxes sur les activités polluantes, nouvelles technologies, économies d'énergie, recours aux énergies renouvelables, engagement des pays rejetant le plus de gaz à effet de serre (Etats-Unis, Chine ou Inde) : les orientations pour enrayer le phénomène restent les mêmes.

Même si les experts les juges insuffisantes, ces mesures vont une nouvelle fois être en discussion, en novembre prochain, à Nairobi, au cours de la réunion annuelle des pays signataires de ces deux traités, la Convention climat et le Protocole de Kyoto.

Du côté de l'Australie et du Canada, alliés traditionnels des Etats-Unis dans la négociation climat, on reste imperturbable après la publication de ce rapport. Ottawa s'est déjà éloigné des objectifs du Protocole de Kyoto pour ne pas pénaliser sa grande industrie. Et Sydney n'a pas l'intention de ratifier ce texte tout en assurant atteindre les objectifs du traité refusé. Enfin à Washington, la Maison Blanche a simplement approuvé les conclusions du rapport sans les commenter.

Dans son état des lieux, Nicholas Stern parle aussi de mettre les consommateurs et les entreprises face aux coûts de leurs actions. "A partir du moment où les émissions de gaz à effet de serre comporteront des coûts plus élevés, les gens seront plus attentifs et chercheront des solutions moins polluantes". Les gouvernements tardent à prendre ce genre d'initiatives impopulaires ; faire payer plus cher l'énergie fossile afin de sensibiliser le public au réchauffement de la planète. Pourtant, le baril de pétrole s'en charge, lorsqu'il augmente. A ce moment-là, les idées de carburant alternatif fleurissent, leur généralisation devient possible. Puis, lorsque le prix du baril retombe et que le consommateur devient moins anxieux pour ses besoins en essence et en chauffage, la vie économique et sociale reprend son cours habituel jusqu'à la crise des prix suivante.

Les changements, difficiles à mettre en œuvre

Par le passé, les filières de recyclage sont devenues viables uniquement après avoir trouvé leur place sur un marché des matériaux de récupération. Si ces filières ont parfois failli disparaître pour cause d'effondrement des cours, elles sont définitivement présentes dans le paysage économique. Et il ne viendrait aujourd'hui l'idée à personne de mélanger aux ordures organiques de vieux journaux ou des morceaux de métal.

Pour les changements climatiques, la question reste encore bien loin de la vie quotidienne. Le solaire et l'éolien, qui n'émettent pas de gaz à effet de serre et dont les réserves sont inépuisables et gratuites, restent encore des expériences exceptionnelles.

Dans les transports, où le pétrole et ses rejets nocifs restent incontournables, rien n'est fait pour favoriser les déplacements non polluants. Celui qui circule en voiture n'est pas pénalisé et celui qui se déplace à vélo n'est pas encouragé. Dans l'un de ses nombreux rapports, le GIEC, Groupement des scientifiques sur l'évolution du climat, suggérait de sensibiliser le public au niveau du porte-monnaie. A la station-service, le conducteur d'un véhicule 4X4 paierait son carburant plus cher que le propriétaire d'une petite berline de 4 ou 5 chevaux. Bien entendu, aucun homme politique de par le monde n'a osé mettre en œuvre ce type d'incitation.

par Colette Thomas


A Heating Bill for the Planet

Global warming is not just undesirable, it's also really expensive. Two reports released this week predict greenhouse gases will throw the world economy into a tailspin if not brought under control.


Carbon dioxide emissions are on the rise again -- after an almost 15-year lull.

UN Climate Change head Yvo de Boer put it best when he introduced the UN's new climate report in Bonn on Monday: "We have to react urgently to climate change. Otherwise, it will be very expensive."

That conclusion came in concert with a UK economic study on global warming -- led by former World Bank chief economist Nicholas Stern and also released Monday -- that forecasts a world economic crisis if climate change is not effectively and immediately combated.

The UN report details a troubling trend: The most important measurement for the human influence on the global climate -- the emission of carbon dioxide (CO2) -- is headed, again, in the wrong direction. After curbing world CO2 emissions through the 1990s, the UN estimates emissions of heat-trapping gases rose from 17.5 to 17.9 billion tons between 2000 and 2004.

Are humans headed for a climate catastrophe? How painful do anti-emissions measures have to be? What comes after Kyoto? These questions will be on the table next week in Nairobi for UN climate talks. Whether world economic and environment ministers will agree on any solution is another question altogether.

Enormous reductions

A bitter fight lies ahead: If a massive change in energy consumption and heavy production is to take place, traffic and consumption would be have to be undergo painful reductions. By the middle of this century, CO2 emissions need to be reduced by up to 60 and 80 percent in industrialized countries, said de Boer.

Sixty to 80 percent? The climate change regulations of the 1990s don't even come close to bringing about that kind of reduction. During the '90s, CO2 levels fell, above all because the break-up of the Soviet Union had caused a worldwide economic slowdown, though advances in environmentally-friendly technology also played a role. Carbon-dioxide emissions actually decreased between 1990 and 2004 by 3.3 percent. That may seem like a paltry success over 15 years -- especially considering the reductions the new report calls for -- but it was an achievement nonetheless.

To arrive at its picture of a world trend, the UN report looked at emissions in 41 industrialized countries. Highlights include the following:

" Germany reduced its CO2 emissions between 2000 and 2004 by a modest 0.7 percent. As a result of the collapse of industry in the former communist east, levels fell by 17.2 percent between 1990 and 2004. Sergej Kononow of the UN climate change secretariat says that's "pretty close to the targets of the Kyoto Protocol."

" CO2 emissions in America increased by 15.8 percent between 1990 and 2004, including a 1.3 percent increase between 2000 and 2004.

" Turkey, Spain and Portugal take the prize for blasting ever more CO2 into the atmosphere. Between 1990 and 2004, the three countries increased their greenhouse gas emissions by 72.6 percent, 49 percent and 41 percent, respectively.

" The biggest question mark left open by the report looms in Asia. China and India, with enormous populations and booming economies, weren't even measured in the report.

The Kyoto Protocol envisioned a reduction of greenhouse gas emissions in industrial nations by 2012 -- at which point developing countries would come on board. Now, with the change in trends since 2000, that goal looks unlikely. The failure of Kyoto targets may complicate worldwide negotiations because the people most affected by climate change live in developing countries. Africa will be the worst affected, says Stern, author of the UK report; at the same time Africa produces a relatively small amount of greenhouse gases.

EU Commissioner Jose Manuel Barroso confessed that EU countries will probably not meet their self-imposed CO2-reduction targets. "This is not a fabrication of some environmentalists," he said, "this is a serious problem that threatens the future of life on this planet."

Nevertheless, Barroso said on Monday at an energy conference in Lisbon that the question of competitiveness and supply security took top priority.

"We can grow and be green"

The US rejected Kyoto and has not reduced its CO2 emissions since 1990. Nevertheless, the US is slowly discovering its green side. Major American companies have instituted their own CO2-reduction policies and individual states like California are enforcing their own environmental laws.

Indeed, Europe can't simply point its finger across the Atlantic. According to Stern's UK Report, Europe has to reduce its CO2 emissions by 30 percent by 2020 and 60 percent by 2050. "This is feasible," said Stern. "We can grow and be green." He argues that if climate change is ignored, the damage to the global economy would be comparable to the Great Depression or the world wars.

British Prime Minister Tony Blair said the Stern Report "has demolished the last remaining argument for inaction in the face of climate change." Britain is pushing for a new framework that would include the US, China and India -- who are not a part of the Kyoto treaty.


The Day the Climate Changed

The climate change debate may have turned an important corner. Sir Nicholas Stern's report not only put a price tag on global warming, but also argues for an economically viable solution. But will humanity act in time?

The day the world's climate changed was a Monday -- Monday of last week, to be more precise, at exactly 10 a.m. That was when a gray-haired man with frameless glasses stood before the press to deliver a clear but alarming message. Now, his message having been delivered, no one can claim not to know the true extent of the damage each individual has been doing to the world.

The core of that message was a number that immediately drove up the planet's perceived temperature: 5.5 trillion. Sir Nicholas Stern has attached a figure to a phenomenon that is little more than a set of vague concepts for most people. He converted complex physical processes into a unit of measure that directly affects people's daily lives: money.

If humanity continues to pump such vast amounts of greenhouse gases into the atmosphere, the cost to society could amount to €5.5 trillion, or about 20 percent of the world's total economic output. By comparison, the Great Depression of the 1930s weighed in with a similar cost to the global economy.

Stern, the former chief economist at the World Bank, offered a detailed list of the consequences of climate change: large swathes of land devastated by drought, flooded coastlines and the extinction of animal and plant species. But what makes Stern's predictions different is that he has added a price tag to many of the calamities associated with climate change, a bill he presented on Oct. 30.

In doing so, Stern, a macroeconomist, has translated the most pressing environmental problem of our age into the language of his profession: climate change, he says, is the "greatest and widest-ranging market failure ever seen."

"No more excuses left"

Was it truly "The Day that Changed the Climate," as Britain's Independent newspaper wrote in a headline with two possible interpretations? Was that Monday truly a magical turning point in the greenhouse gas debate? And is the world community finally making the switch from talk to action?

At least environmental activists feel vindicated that business has finally understood what they have been preaching for years. "There are no more excuses left, no more smokescreens to hide behind," Charlie Kronick of the environmental organization Greenpeace said with a smirk. Even the pro-business Handelsblatt agreed, writing that it is no longer sufficient for corporate executives to install some "tiny windmill at corporate headquarters that barely suffices to power the lights in the executive bathrooms." And politicians have seized the opportunity to address the issue head-on. "This disaster is not set to happen in some science-fiction future," said British Prime Minister Tony Blair who, standing on the stage with Stern, called the 616-page report on the consequences of climate change "the most important document about the future" that he had read since becoming prime minister.

As is always the case when it comes to climate change, the report also had its critics. Stern deliberately used only the gloomiest of predictions in his report, says Dutch climate economist Richard Tol, who calls Stern's conclusions "alarmist and incompetent." But Nobel Prize-winning economist Robert Solow praised Stern's report as being practical and for providing a blueprint to avoid the coming disaster. He was especially impressed by Stern's choice of words, which is devoid of the kind of morally charged doomsday rhetoric favored by the environmentalist community. Instead, Stern soberly presents a cost-benefit analysis, which concludes that an investment of only 1 percent of world economic output would suffice to avert the direst consequences of global warming.

This is Stern's good news. He sees investment in protecting the climate as a giant subsidy program that could stimulate the economy to flourish on a new, greener note. "The transistion to a low-emissions global economy will open many new opportunities across a wide range of industries and services," Stern writes enthusiastically. He adds that "markets for low carbon energy products are likely to be worth at least $500 billion per year by 2050, and perhaps much more."

Political wind from the UK

Tony Blair, thrilled by this healthy dose of pragmatism, promptly placed perhaps the liveliest advocate of climate protection at the economist's side, former US Vice President Al Gore. Together, Blair hopes, the two men will be able to convince the United States, the world's largest producer of CO2, to cooperate.

A sharp political wind is blowing from the British Isles, a wind felt by German Chancellor Angela Merkel when she met with Blair in London on Friday. With Germany set to assume the revolving European Union presidency and host the G-8 summit in 2007, Blair wants Merkel to make sure that climate change is at the top of the agenda -- a concept that Merkel agreed with. It would be a bitter pill to swallow for Germany, a pioneer when it comes to environmental protection, if the British were to proclaim themselves the guardians of the planet's climate. "We are not playing at the same level," German Minister of the Environment Sigmar Gabriel said in an interview with DER SPIEGEL.

The environmental rhetoric, of course, is not new. But rhetoric is just that. So far, there has been no noticeable reduction in CO2 output. The global economy -- and affluence -- is growing too rapidly, which has translated into ever-rising rates of greenhouse gas emissions -- a jump of 2.4 percent just since 2000. The biggest culprit is the radical increase in the number of vehicles on the world's roads -- a jump of 23.9 percent since 1990, Yvo de Boer, the Executive Secretary of the United Nations Framework Convention on Climate Change, said on Monday.

Such are the realities being addressed by the some 6,000 delegates in Nairobi, Kenya this week and next for the United Nations Climate Change Conference. The debate will revolve around two main issues: What can be done now to prevent temperatures on earth from rising another 5 degrees Celsius (9 degrees Fahrenheit)?

And how should mankind prepare for the 2 degree Celsius (3.6 degree Fahrenheit) rise in temperatures that is now considered inevitable?Such scenarios are based on the conclusions of decades of research on changes in the earth's atmosphere and climate. "The data have largely confirmed the hypotheses we have developed in the last 20 years," says Hans von Storch, a preeminent German climate modeler who is widely seen as a voice of reason in the often hot-headed global climate change community. Storch's thoughts will also be reflected in the tenor of the fourth assessment report to be issued in February by the UN Intergovernmental Panel on Climate Change (IPCC), the details of which are currently being negotiated by several hundred scientists, who expect the report to serve as a small reflection of consensus among their views.

Disturbing trend upwards

More than a century ago, Swedish Nobel Prize winner Svanta Arrhenius already speculated that carbon dioxide heats the atmosphere. He hypothesized that if mankind were to double the CO2 content in the atmosphere, this would lead to a temperature increase of four to six degrees Celsius (7.2-10.8 degrees Fahrenheit). Far from troubled by his conclusions, Arrhenius wrote that he looked forward to an end to cold Nordic winters.

The first scientist to sound the alarm was an American professor named Roger Revelle. In the 1950s, Revelle began regularly climbing Mauna Loa, a 4,170-meter (13,681-foot) volcano on Hawaii. From the summit, he would release weather balloons equipped with instruments to measure atmospheric concentrations of CO2. The jagged curve reflecting his readings revealed a disturbing upward trend.

Revelle quickly understood what this meant. In hearings before the US Congress, he warned that something dramatic was happening on the planet that had never happened before. At the same time Stephen Schneider, a respected US climatologist, speculated that the earth could be on the verge of a new ice age. But neither scientist was taken truly seriously.

The debate did not reemerge until the 1980s, this time at the instigation of the nuclear lobby, which recognized the threat of global warming as an excellent argument in favor of low-emission nuclear energy technology. Climate research was evolving into a billion-dollar discipline at about the same time. Scientists used increasingly powerful computers to simulate the atmosphere, ice cores from Greenland and the Antarctic to reconstruct the history of the world's climate and buoys and balloons to trace global air and water currents. All of this research produced the myriad of mosaic pieces that, when put together, form the disastrous picture dominating the current debate over climate change.

The smugness with which the predictors of climate change painted the coming disaster in increasingly gloomy colors certainly provoked resistance. But their strongest critics are fast becoming a vanishing minority.

Part II: Approaching the "critical tipping point"

The Day the Climate Changed (2)

One of those critics, Richard Lindzen of the Massachusetts Institute of Technology, even finds the three major UN climate reports unpersuasive. In his view, the computer models on which the climate establishment bases its theories are simply incorrect. According to Lindzen's calculations, the earth's temperature will increase by no more than 1 degree Celsius (1.8 degrees Fahrenheit). The global climate has changed many times in the history of mankind without human intervention. But in all these cases, argue the majority of climate researchers, there have been natural explanations for the rise and fall of temperatures, such as solar activity and fluctuations in ocean currents.

Two years ago the dissidents in the climate community received new impetus when bestselling US author Michael Crichton wrote a clever mixture of fact and fiction. In his novel "State of Fear," Crichton describes an unscrupulous alliance of climate researchers and eco-terrorists who plan to trigger a tidal wave to shake up mankind. In an interview with ABC News, Crichton claimed that "environmental organizations are fomenting false fears in order to promote agendas and raise money."

But Crichton ultimately lost the battle for images in the heads of ordinary citizens when he encountered an opponent, a true specialist in the dramaturgy of apocalypse: Hollywood director Roland Emmerich. His film, "The Day After Tomorrow," is literally reeling in climatic apocalypse. First a series of giant waves inundates the world, and then it freezes to death under a thick blanket of ice -- to the horror of millions of moviegoers. Only a year later, nature seemed to be intent on confirming the film's message, when Hurricane Katrina flooded the city of New Orleans.

But is it truly legitimate to attribute such catastrophes to effects of climate gases? Haven't there always been droughts, famines, storms and epidemics?

It is, in fact, impossible to clearly attribute individual natural events to the greenhouse effect. Scientists can only reach reliable conclusions by using average values. Based on these mean values, they predict that the world's climate will indeed change significantly. And the evidence is overwhelming.

Methane time bomb

Schoolbooks have always taught us that the carbon dioxide concentration in the air is 0.03 percent. That number has long since increased to almost 0.04 percent, a jump of almost a quarter. As tiny as this difference may seem, it has a powerful impact on global weather. Like the glass in a greenhouse, carbon dioxide, combined with water vapor and other gases, prevents the heat reflected by the earth's surface from escaping into space. The higher the carbon dioxide content in the air, the more heat is retained in the atmosphere. The earth is already about half a degree Celsius (almost 1 degree Fahrenheit) warmer than it was in the pre-industrial age. Experts predict that if greenhouse gas emissions are not reduced, the average global temperature will increase by 2 degrees Celsius (3.6 degrees Fahrenheit) by 2050. By the year 2100, the earth could even be 5 degrees Celsius (9 degrees Fahrenheit) warmer than it is today. For the sake of comparison, the difference in global temperature between the last ice age and the present is also about 5 degrees Celsius.

"Further global warming exceeding 2 degrees Fahrenheit will be dangerous," says Jim Hansen, Director of the Goddard Institute for Studies at NASA. "Unless this fact is widely communicated, and decision-makers are responsive, it will soon be impossible to avoid climate change with far-ranging undesirable consequences." Like many climate experts, Hansen fears what he calls a "critical tipping point," which, once exceeded, could have major consequences. For example, scientists expect a dramatic acceleration in global warming if the permafrost in the Siberian and North American tundra thaws.

In those regions, the earth is frozen several kilometers deep. But this fascinating landscape is literally groaning in response to the new rise in temperatures. Some experts fear that up to 90 percent of this now rock-hard earth could thaw before the end of the century. They also expect the frost line to shift northward by several hundred kilometers in the near future. Such changes promote even more warming, because melting snow and ice on the tundra allows darker vegetation to sprout. The new vegetation will absorb solar radiation at a higher rate than the reflective ice, and the region's temperatures will rise even further.

But even that isn't the biggest problem. The permafrost in the frozen Arctic regions conceals a true time bomb in the form of an estimated 400 billion tons of trapped methane, a much more potent greenhouse gas than CO2. If only a fraction of that methane is released during warm weather, the world's temperature will likely rise even further. At some point, this could lead to a scenario that is truly horrific for climate researchers: the melting of the Greenland ice cap.

This giant reservoir of ice -- up to three kilometers thick and five times the size of Germany (an area larger than the entire eastern seaboard of the United States and California combined) -- is already beginning to thaw. "The Greenland icecap is melting at the stupendous rate of 235 cubic kilometers a year," says Australian zoologist and paleontologists Tim Flannery, author of the book "The Weather Makers." "If it succumbs to the heat, the ocean will rise by six meters, and icecaps in the Antarctic may destabilize."

Up to 200 million at risk

Does this mean that cities like Tokyo, Lisbon and New York will soon be submerged? Experts say it will take another 1,000 years until Greenland is ice-free. By the end of this century, scientists expect a rise in sea levels of only 10 to 90 centimeters (4 to 35 inches). But even that will create problems for the global community.

Seventy-five million people living in coastal regions worldwide are currently at risk for storm-related flooding. In its report titled "The Future of the Oceans: Too Warm, Too High, Too Acidic," a scientific advisory board to the German government predicted that if sea levels rise by 40 centimeters (16 inches), this number will jump to an estimated 200 million. More than 500,000 people already live on low-lying islands like the Maldives or on Pacific atolls barely above sea level. Some residents of the island nation of Vanuatu have already been relocated to higher ground. And in Indonesia, global warming has forced people to make adjustments in their daily lives for years.

"We must leave our village several times a year because the sea is flooding larger and larger sections of the beach," says Maryandi, the village supervisor in the community of Cemera Java, 150 kilometers (93 miles) from the capital Jakarta. The phenomenon, says Maryandi, is increasingly leading to the salination of the region's wells.

Last year Singapore recorded the largest amounts of rainfall since weather records were first kept. The water in the Gulf of Thailand, say climatologists, is already warmer by between 1 to 1.5 degrees Celsius (1.8-2.7 degrees Fahrenheit). Thai oceanographer Anond Snidvongse warns that this could have devastating effects on the mainland. "We expect flood-related landslides in northern Thailand, and even Bangkok will be plagued by unprecedented flooding."

Climate change has long since become part of everyday reality for people elsewhere as well. The Inuit in the Arctic regions have also reported rapid and dramatic changes. For example, species of birds are fish are appearing for which they have no name in their language. Hunters are catching fewer seals, walruses and polar bears, all animals whose life cycles are closely tied to sea ice. Indeed, a photo of a polar bear jumping from one ice floe to the next has already become an iconic image of climate change. The enormous animals can only hunt seals on sea ice. But with winter arriving later and later each year and the ice melting earlier in the season, the bears are unable to catch enough food to develop the fat layers they need to survive.

More rain, more drought

The Arctic ice cap is already melting at a rate of 8 percent per decade. Since the beginning of satellite imaging, scientists have never observed a smaller area covered by sea ice between Greenland and Siberia than they did last summer. In August 2005, the Russian ship "Akademik Fyodorov" was the first vessel in seafaring history to cross the North Pole without the use of ice breakers.

The situation on land is no less alarming. The Arctic's entire water balance will be upset if the permafrost melts. Researchers have already observed swollen rivers and entire lakes seeping into the ground. The volume of water emptying into the Arctic Basin through Russian rivers like the Ob has increased by 7 percent in the last 60 years.

Scientists fear that this could have grave consequences, not just for the region but also for the global climate. In a worst-case scenario, if the added fresh water reduces the salt content of the Arctic Ocean, it could even lose its function as the "outstanding role in the global climate system," warns Volker Rachold of the International Arctic Science Committee. This would also affect the temperate Gulf Stream, which provides Europe with its mild climate.

The result, says scientists, would be more rain in the higher latitudes and less precipitation in regions of the earth that are already dry. Developing countries would suffer the most as a result of this trend. British ecologist Norman Myers expects the phenomenon to produce up to 200 million climate refugees. By 2050, five times as much land as today could suffer from extreme drought, including the Mediterranean region and parts of Africa, South and Central America.

"Melting glaciers will increase flood risk during the wet season and strongly reduce dry-season water supplies to one-sixth of the world's population, predominantly in the Indian sub-continent, parts of China, and the Andes in South America," Stern writes in his report. Salinated drinking water, poor harvests and waves of epidemics are the potential consequences, Stern writes. According to a study by the World Health Organization (WHO), climate change is already responsible for the deaths of more than 150,000 people each year. The principal cause is the increase in the incidence of certain diseases. For example, if the anopheles mosquito, which carries the malaria virus, is able to breed in growing areas of standing water, the risk of disease increases automatically. Stern expects a global temperature increase of 2 degrees Celsius (3.6 degrees Fahrenheit) to lead to 40 to 60 million additional deaths in Africa alone.

Part III: Natural world being turned upside down

The Day the Climate Changed (3)

The natural world is turned on its head as soon as the earth's temperature and water balance changes. When birds like the Pied Flycatcher return from their winter habitat, the caterpillar season is already over, depriving them of food for their young. Because of rising temperatures in the Swiss Alps, butterfly species, like the Almond-Eyed Ringlet, are increasingly flying up to the peaks. The Hummingbird Hawkmoth, normally native to the Mediterranean, is turning up in gardens in northern Germany. Another Mediterranean transplant, the Yellow Sack Spider, whose bite is as painful as a wasp sting, is now terrorizing the inhabitants of the eastern German state of Brandenburg.

Germany on the whole can expect to see significant changes when temperatures rise. For some, the prospect of sitting under palm trees growing on the Baltic Sea and spending warm October evenings in Hamburg's waterside cafes is appealing. In fact, an increase of 2 to 3 degrees Celsius (3.6-4.8 degrees Fahrenheit) is considered very likely in Germany by the end of the century -- to the delight of the tourism industry. But according to the predictions of climate researchers, balmier temperatures will come at the cost of heat waves and torrential rain storms.

"The weather will simply become more extreme," says Daniela Jacob of the Max Planck Institute for Meteorology in Hamburg, the chief author of "Regional Climate Simulations for Germany, Austria and Switzerland," a study published in April by Germany's Federal Office of the Environment. Jacob and her colleagues used a supercomputer to compute the nation's climatic fever curve until the year 2100. The result -- 42,000 gigabytes of climate data now in storage on the 16th floor of a Hamburg university building -- reveals a clear trend toward wetter, warmer winters and drier summers than in the past. The climate in eastern Germany could become almost Mediterranean. Does this mean that northern Germany can soon expect abundant sunshine?

In fact, Germany would be one country that would actually see benefits from climate change. Hotel owners on the Baltic Sea coast, where temperatures could increase by up to 3 degrees Celsius (5.4 degrees Fahrenheit), would likely see their business pick up considerably.

"Might as well close up shop"

But the mood is mixed in other industries. Environmentalists would likely be pleased to see the unpopular spruce tree becoming one of the first victims of climate change in Germany. But some forestry experts are less sanguine. "Warmer temperatures weaken the spruce tree but strengthen pests," says Christian Kölling of the Bavarian State Office of Forests and Forestry. This year, for example, 2,500 hectares (6,172 acres) of spruce forest in Middle Franconia were killed off by the Bark Beetle. "We will just be able to cope with a two-degree temperature increase, because our native beech trees would survive," says Kölling. "But if we get five more degrees, we might as well close up shop."

Scientists predict that the end of the century will bring more frequent "tropical nights" to Germany, with temperatures not falling below 20 degrees Celsius (68 degrees Fahrenheit). The number of hot days with temperatures above 30 degrees Celsius (86 degrees Fahrenheit) will likely more than double in Berlin, for example. While this may be welcome news for ravers attending the city's Love Parade, others would be less adept at dealing with the heat.

The list of consequences of climate change goes on and on. For example, some of the world's cultural heritage sites, like Japan's Itsukushima shrine or Venice's waterside palazzi would already be submerged if sea levels rose by only one meter (about three feet).

But there is one scenario that truly has concerned scientists losing sleep: the ecological catastrophe that appears to be on the verge of taking place in the oceans. Fish are changing their migration patterns to escape warmer waters. Toxic algae are on the rise. Coral reefs suffer in three ways. When the water temperature rises, the coral polyps shed their symbiotic algaes and the reefs become bleached. If the sea level rises too quickly, the corals, which depend on light, sink into permanent darkness. Finally, if the CO2 concentration in seawater becomes too high, the resulting acidification will dissolve the calcium in the coral. The skeletons of corals have already become measurably thinner in many locations. Armored plankton organisms such as single-cell algaes and tiny marine winged snails are also at risk. These organisms play an especially critical role in the marine ecosystem, because they form the base of the entire food chain.

Scientists have been issuing warnings about the coming disaster in the oceans for years. Given these warnings, some experts have wondered, during the past week, why it should cause such an uproar when an Oxford professor releases a study listing problems that are already known.

Ahead of terrorism and war

Indeed, Stern's report did attract a great deal of attention in Great Britain. Perhaps it came at just the right time, following a scorching summer, water shortages and, finally, an attack on the sacrosanct English lawn in the form of a ban on sprinklers. All of these factors have affected Britons. Indeed, the issue of global warming has apparently taken the British national consciousness by storm in recent months. According to a September opinion poll, Britons consider the greenhouse effect to pose the "most serious risk to the future of the planet," ranking it well ahead of terrorism and war.

The result has been the establishment of something of a green coalition among the major parties in the UK. Indeed Blair, who would prefer to discuss the Iraq debacle as little as possible, isn't the only one who has suddenly discovered climate protection. Opposition leader David Cameron of the conservative Tory Party has also declared the environment as one of key concerns. Advisors to both parties agree that protecting the climate is an issue that plays well with voters.

But it's a completely different story in Germany, already a self-appointed model of environmental consciousness. Although German companies are undoubtedly among the world's leaders when it comes to solar energy and windmill construction, climate protection has otherwise led a strange, shadowy existence in Germany for years. The apocalypse was still at the top of the agenda in the 1980s, when issues like dying forests, smog and toxic waste dominated the public debate. But interest has waned, and the general public has grown weary of listening to talk about environmental hazards. Even Chancellor Merkel hasn't exactly made much of an enthusiastic impression lately when it comes to the environment. The upshot is that she is now forced to look on as the British take the lead on the new environmental agenda. In a speech at the British Embassy in Berlin a few weeks ago, British Foreign Secretary Margaret Beckett urged the Germans to take a more active role: "you here in Germany ... have the economic clout and diplomatic and moral authority to make a significant difference now."

It is ironic that Merkel, a former minister of the environment and a pioneer on climate protection, must now listen to lectures from the British. It was Merkel who, in 1995, supported Germany's first legislation to combat summer smog. Later she even opposed her own party's official position in arguing for an eco-tax. When it came time to ratify the Kyoto Protocol, Merkel was one of the most vociferous proponents of massive reductions in CO2 emissions.

But once she became chancellor, Merkel -- like many of her fellow politicians in Germany -- lost sight of the issue. Now, though, the chancellor has decided to make climate and energy policy focal points during her stint as EU president in the first six months of 2007. Merkel hopes to commit the EU to a reduction in CO2 emissions by at least 30 percent in the next 14 years. More importantly, she hopes to press US President George W. Bush to make a stronger commitment to international climate protection efforts.

The chances of achieving a major shift in direction are better than ever. Even in the US -- the country responsible for the greatest transgressions against the world's climate -- a sort of popular environmental movement is now underway that hardly anyone would have believed possible only five years ago. In 2001, shortly after taking office, Bush announced that his administration planned to ignore the Kyoto Protocol, which calls for a gradual reduction in emissions of carbon dioxide and other greenhouse gases.

"Freedom fuel"

For the next five years, Bush showed no interest whatsoever in climate protection. Indeed, he seemed intent on vociferously championing the energy-hungry "American way of life." But then, suddenly, he gave a speech this January in which he told Americans that they were "addicted to oil," conveniently ignoring the fact that he himself had encouraged this addiction all along. Indeed, Bush seemed to have forgotten that he was the one who had chipped away at his predecessor's environmental record and had even frozen the government's support for solar and wind energy.

But now Bush seems to have understood that he can only make headway in his fight against terrorism by reducing America's dependency on Middle Eastern oil. He has even taken to promoting biodiesel from American farms as "freedom fuel."

What Bush and his advisors also haven't failed to notice is that there has been a dramatic shift in the public perception of climate change. Magazines like Time and Newsweek are suddenly treating the subject as cover story material. Al Gore's documentary film "An Inconvenient Truth" quickly became a box-office success. These days even the religious right is taking a more concerned view of the heavens. Indeed, a group called the Evangelical Climate Initiative has warned: "millions of people could die in this century because of climate change."

A muscle-bound Austrian has taken the lead among US politicians touting the environment. California Governor Arnold Schwarzenegger recently signed legislation that requires a 25 percent reduction in CO2 emissions by 2020 in his state. The legislation also calls for installing solar panels on a million houses to take advantage of California's sunny climate by 2018.

In a recent speech at Harvard University, former German Foreign Minister Joschka Fischer said: "I'm not here to campaign for Arnie," but added that Schwarzenegger's energy policy is right on target. According to Fischer, the outcome of the California gubernatorial election on Nov. 7 would send an important signal when it comes to protecting the environment. Fischer reasoned that if a majority of the voting public in the most populous US state, with its 36 million inhabitants, voted for Schwarzenegger's eco-agenda, politicians in other US states would invariably emulate his approach. With the California governor now having been comfortably re-elected, others may take notice.

Part IV: Is there an upside to global warming?

The Day the Climate Changed (4)

Experienced power broker Fischer isn't the only one who senses that something is in the works. Could it be because commerce and environmentalism are no longer pursuing mutually exclusive goals on the issue of climate protection? After all, Germany already derives close to 7 percent of its electricity from the renewable sources of wind, solar and biomass. Despite falling subsidies, that number is expected to increase, so much so that the alternative energy sector plans to invest about €200 billion in Germany between now and 2020. Its ambitious goal is to eventually derive one-fifth of German electricity production from green sources.

Windmills are already producing electricity at a cost only a few cents above that of coal-fired power plants. German-made windmills have even become a successful export item, to the astonishment of many former skeptics. "We are regularly sending four ships from Århus to Houston these days," says Andreas Nauen, the head of German electronics giant Siemens's wind power division.

There has also been a noticeable shift in the public consciousness on a second front. For many years, politicians, environmentalists and climate researchers would accept only one solution to global warming: radical reductions in CO emissions. "All other proposals were seen as something akin to treason," complains climate modeler Hans von Storch.

But the heretics' ideas are also gaining gradual acceptance. Humanity, they argue, must develop ways to cope with climate change, ways that would include constructing dikes, building desalination plants and developing drought-resistant plants.

Politicians and scientists alike are even beginning to put a more positive spin on the issue. In an article published in the journal Nature, Dutch environmental experts Pavel Kabat and Pier Vellinga argue that the debate should not be shaped by "fear of the negative effects of climate change." Instead, they write, the adjustment to change ought to be "driven by opportunities for technological, institutional and societal innovations."

Planning for global warming

Kabat and Vellinga know what they're talking about. Sixty percent of the Netherlands is already below sea level. Only a sophisticated system of dikes and dams separates the Dutch from a watery burial in the North Sea. In 2000, the country also implemented a new "Living with Water" strategy, under which it plans to avert damage from future floods by opening up large swathes of the hinterlands to flooding and not relying purely on its dikes to keep the water out.

Kabat and Vellinga envision large "hydro-metropolises,"-- floating cities in other words -- that could one day provide an environment for 15 million people to live and work "on and surrounded by water." As futuristic as the idea may seem, it is consistent with reality. After all, we are no longer capable of preventing the consequences of global warming. The challenge now is to minimize the costs of change.

In many cases, it is easy to predict whether a timely adjustment to change will be worthwhile. The North Sea island of Sylt is a case in point. A study titled "Climate Consequences for Man and the Coast" paints a scenario of what would happen if sea levels in the North Sea rose by 25 centimeters (about 10 inches). According to the authors' calculations, building sand breakwaters off the coast of Sylt that could withstand the fury of the North Sea would cost about €33 million. They also estimate that the benefits of the wall of sand, in terms of protecting property, houses, beaches and dunes, would be worth €381 million, or about twelve times the cost of the project.

But how far are human beings willing and able to go to protect their ancestral territory against climate change? What is the right balance between avoidance and adjustment? Hans-Joachim Schellnhuber, the director of the Potsdam Institute for Climate Impact Research, summarizes what he sees as the optimal strategy as follows: "The goal is to avoid the uncontrollable and control the unavoidable."

British economist Stern concludes that the balance between adjustment and avoidance is ultimately a question of money. The faster we reduce CO2 emissions, the more expensive it will be for the global economy. Stern's recommendation is to avoid setting overly ambitious goals. In the long term, according to his report, it will be sufficient if we can prevent the carbon dioxide content of the atmosphere, currently at 380 parts per million (ppm), from exceeding 550 ppm. According to Stern's analysis, this would cost humanity about 1 percent of world GDP -- an amount he considers "significant" but also "fully consistent with continued growth and development, in contrast with unabated climate change, which will eventually pose significant threats to growth."

According to the Stern study, this would avert the most serious consequences of global warming, sparing the earth a heat shock of 5 degrees Celsius (9 degrees Fahrenheit) or more. Instead, the world would get off lightly with only 2-3 degrees Celsius (3.6-5.4 degrees Fahrenheit) rise in global temperature. Efforts to prevent even that from happening would lead to exploding costs, the Stern report concludes.

Even limiting the CO2 concentration in the atmosphere to 550 ppm won't be easy. It would require a 25 percent reduction in greenhouse gas emissions by 2050 -- and that in a period in which the planet's economic output is expected to more than double.

Stern has calculated the tremendous effort this would entail. A 25 percent reduction target could only be reached, according to Stern, if mankind managed to reduce its energy consumption to 25 percent of current usage as compared with unbridled growth.

Would this mean that the average German would only be permitted to drive 5,000 instead of 20,000 kilometers a year? And instead of consuming 2,000 liters of heating oil, would he be forced to make do with 500 liters to keep his home warm throughout the winter? Even Stern knows that expecting these kinds of sacrifices is hardly realistic. Instead, man will be forced to resort to inventiveness as a way of defending his beloved comforts. Inventiveness is something than can be encouraged -- and this is where Stern reveals his bias as an economist -- with the help of the market.

Luring industry

One approach is to impose draconic taxes on carbon dioxide emissions. But the more intelligent solution, many scientists believe, is to balance man's climatic checkbook not with the instruments of politics but with those offered by the capitalist system. The trick is to define carbon dioxide as an economic good -- not unlike wheat, automobiles or athletic shoes -- which would be traded on a market for emissions.

The EU already operates such a market, and more than 100 US companies have established a system on the new Chicago Climate Exchange whereby a limited number of emissions reduction certificates is issued for sale each year. This suddenly makes it economically attractive for companies to invest in climate protection, either by promoting greater energy efficiency within their own operations or supporting projects to reduce CO2 emissions elsewhere in the world. UN Climate Secretary Yvo de Boer estimates that the latter approach could generate €100 billion in annual subsidies for the Third World, money that would be spent on modern power plants, solar stoves and low-energy light bulbs.

The Stern report also favors emissions trading and recommends expanding this tool globally. Stern already sees the emergence of a sort of new industrial era on the horizon. It could signal the advent of CO2-free coal power plants of the sort German energy giant Vattenfall plans to build in the Niederlausitz region southeast of Berlin. CO2 sequestration, another potential approach reducing CO2 emissions, is currently being tested near the eastern German town of Ketzin.

The fuel of the future could also come from crops. After accounting for the amount of agricultural land needed for food production, Germany would have about 3.5 million hectares (8.64 million acres) of farmland left over to grow corn and other energy-rich plant species in 2020. The biomass produced on this farmland would be enough to replace a quarter of German fuel consumption, according to estimates by Germany's Agency of Renewable Resources.

Human beings, in other words, will have to come up with the necessary inventive and entrepreneurial spirit to meet the challenge. Only the scientific and business communities have the power to ensure that humanity can adjust to its changing environment. But have business leaders gotten the message yet?

Strange things are happening in the business world. BP, for example, is now saying that its name no longer stands for British Petroleum but "Beyond Petroleum," and its Web site greets visitors with images of windmills and lots of green. HSBC has declared its intention to be the world's first major bank to become carbon neutral by offsetting its 500,000 tons in annual CO2 emissions with the construction of wind farms in New Zealand.

But are these nothing but marketing tricks? Or could we be seeing a new breed of corporate executive, the pinstriped environmentalist? Nowadays, environmental organizations like Greenpeace are no longer the only ones defining corporations as good or bad environmental citizens.

Analysts at financial service provider Dow Jones have now developed something they call a sustainability index, which values the major, publicly traded companies on the basis of their contribution to environmental sustainability. "Companies are clamoring to get in," says Sven Bode, a climate expert with the Hamburg-based World Economic Archive, "it's the only way to gain the confidence of investors."

Indeed, CO2 emissions have become a barometer of corporate performance. If a company's emissions are higher than those of the competition, investors are likely to believe that its production is less efficient.

Inefficiency being such a dirty word among analysts and investors, there just might be something to the saying that's currently making the rounds on Wall Street trading floors: "Green, now that's the color of money!"

By Philip Bethge, Jörg Blech, Rüdiger Falksohn, Thomas Hüetlin, Jürgen Kremb, Roland Nelles, and Gerald Traufetter

Translated from the German by Christopher Sultan

Oxfam Press Release -30 October 2006

Oxfam's reaction to the Stern report on climate change

The UK government released today a report on climate change compiled by Sir Nicholas Stern, adviser to the government on the economics of climate change and development. Stern is a former chief economist of the World Bank. The report, which was commissioned by HM Treasury, looks into the economics of climate change. It concludes that climate change represents the greatest and widest ranging market failure ever seen, and that if we want to tackle climate change it is more cost effective to tackle it now than later.

"The desperate sense of urgency that runs through this report has to be matched by immediate government action. From New Orleans to New Delhi, climate change affects us all. The international community's blinkers have to come off as not only will immediate action on climate change save money in the future but it will also save lives in the world's poorest countries today. For hundreds of millions of people living under the constant threat of drought or flood, urgent action on climate change is vital," said Phil Bloomer, Oxfam's Director of Campaigns and Policy.

Oxfam's three key points on the Stern Review

There are three key criteria to judge a viable international plan of action on climate change: is it realistic, does it meet the challenge, is it fair

Is it realistic?

This is the Review's most important contribution. What is needed is global leadership and a global framework to go beyond the Kyoto agreement. The biggest political stumbling block on this has been that it will be too expensive. The Stern Review thoroughly refutes this argument and shows that it is only cost effective if we act now. Acting in the future will be far too costly.

Does it meet the challenge?

Setting a ceiling for greenhouse gas concentration levels in the atmosphere of 550 parts per million (ppm) may make economic sense in the rich world where our relative wealth may buffet us from some of the effects of climatic extremes. However in the world's poorest countries which are more vulnerable to changes in the climate the risks involved with settling for such a ceiling are far too high. A less risky and fairer ceiling would be 450ppm.

Is it fair?

The Stern Review is very strong on describing the unfair way climate change affects people living in poverty. They are least responsible for the problem, have benefited less from levels of carbon use, but are paying the biggest price. The level of greenhouse gases in the atmosphere is historically a result of rich world activity. Therefore to be fair, the rich world should bear the full costs of adapting to climate change, at least in the early years.


November 15, 2006

"Frightening" lack of climate leadership: Annan

By Gerard Wynn and Alister Doyle

NAIROBI (Reuters) - U.N. Secretary-General Kofi Annan criticized a "frightening lack of leadership" in fighting global warming on Wednesday and urged top emitters led by the United States and China to do more to curb greenhouse gases.

Annan, addressing about 70 environment ministers at a November 6-17 U.N. climate conference in Nairobi, also launched a plan to help Africa to win investments to confront feared climate changes such as floods, droughts and rising sea levels.

"Climate change is not just an environmental issue, as too many people still believe. It is an all-encompassing threat," he said. The talks are seeking ways to extend the Kyoto Protocol, the main U.N. plan for fighting climate change, beyond 2012.

"While the Kyoto Protocol is a crucial step forward, that step is far too small. And as we consider how to go further still, there remains a frightening lack of leadership," he said.

He told a news conference that his remarks were "not directed at any individual or president" when asked if he was especially targeting the United States, the world's biggest source of emissions and which pulled out of Kyoto in 2001.

Still, he added: "I think it would be preferable if they signed the Kyoto agreement."

And he also said that big developing nations had to act to rein in emissions, mainly from burning fossil fuels in factories, power plants and cars.

"If we mention some of the bigger developing country economies, India and China, they also have to begin to take this seriously because they are at the stage where they are also beginning to produce greenhouse gases and emissions," he said.

The United States is top emitter ahead of China, Russia and India.


"Global climate change must take its place alongside those threats -- conflict, poverty, the proliferation of deadly weapons -- that have traditionally monopolized first-order political attention," Annan said.

"It is increasingly clear that it will cost far less to cut emissions now than to deal with the consequences later."

Under Kyoto, 35 countries plan to cut emissions of heat-trapping gases to 5 percent below 1990 levels by 2008-12.

President George W. Bush said that caps on emissions would harm the U.S. economy and that developing nations were wrongly omitted from goals for 2012. Bush favors big investments in new technologies, such as hydrogen or cleaner coal.

Annan, a Ghanaian who will step down from his post on December 31, also announced the plan by six U.N. agencies called the "Nairobi Framework" to help developing nations, especially in Africa, get more funds to promote clean energies such as wind and hydropower. He urged rich donor nations to contribute.

He said higher temperatures could damage health by spreading diseases, or undermine food production via droughts. Coastal cities could be swamped because of melting icecaps.

Kenyan President Mwai Kibaki urged all to ratify Kyoto.

"Tackling climate change is not a matter of choice," he said. "It is an imperative that must be addressed if we are to ensure the continued survival of life on our planet."

At the talks, negotiators reaffirmed a goal of agreeing an extension of the Kyoto Protocol beyond 2012 "as early as possible" but disappointed environmentalists who had wanted deadlines for reaching accords to spur more action.

"It was the minimum needed to keep this process moving forwards," said Jennifer Morgan of the U.K.-based environmental think-tank E3G.

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