Environmental Engineering Reference
In-Depth Information
are, nonetheless, many cases in which the benefits from restoring degraded ecosystems
far outweigh the costs'. Such action can also be cost-effective ways of mitigating the
effects of climate change. Of course, economists have been searching for ways to
accurately account for nature. In a seminal article in
Nature
, after many years of
research, Robert Costanza and his colleagues (Costanza
et al
., 1997) did put a price
tag on the biosphere as a whole, valuing it at a cool $33 trillion annually. With
inflation, it has probably increased markedly since the time of that estimate irrespective
of the arguments, debates and refinements that have been published since. Indeed,
Costanza argued that the $33 trillion ought to be viewed as a low estimate and that
in future years, natural capital stocks and ecosystem services would become
increasingly stressed and undoubtedly more scarce. A useful comparator is perhaps
global gross national product (GNP). In 1997 the minimum estimate of the global
GNP total was US$18 trillion per year. In 2012, according to the
CIA World Fact
Book
, nominal gross world product (GWP) was estimated to be US$71.83 trillion.
However, it is the UK's Stern Review (Stern, 2005), which quantified the likely
economic effects of climate change for business and society, that has significantly
caused a sharp refocusing of governmental and media interest throughout the world
on environmental and sustainability issues. The Stern Review noted that if the
world does not act immediately, the costs of climate change could be in the region
of 5 per cent of global GDP each year from now - and for ever. If wider impacts
are accounted for, the figure could conceivably rise to 20 per cent. In contrast, the
costs of action, of reducing greenhouse gas emissions, are likely to be in the region
of 1 per cent of GDP. Therefore, what governments, businesses and society do in
the next twenty years will affect life for the rest of the twenty-first century. The
Review also argued that although climate change was a clear example of market
failure, necessary remedial action need not negatively affect the aspirations of either
rich or poor countries and could, in fact, promote a pro-growth strategy. For instance,
each ton of CO
2
emitted causes damage worth at least US$85, but emissions could
be cut for less than US$25 a ton. If the world shifts to a low-carbon development
pathway, this could eventually benefit the economy by US$2.5 trillion a year, and
by 2050 markets for low-carbon technologies are likely be worth in the region
US$500 billion. Conclusion: a new economy of nature urgently needs to be developed
(Daily and Ellison, 2003) recognizing the issues that may arise from the fact that
money in itself does not have a moral value, although it is through money terms
that morals, human desires and passions are frequently mediated (Harvey, 1996).
The Review argues that explicit action aimed at dealing with climate change will
create significant opportunities for business. There will be new markets for low-
carbon energy and goods and services, producing excellent profits and opportunities
for employment in these new sectors. New energy technologies will allow economic
growth to be decoupled from the production of greenhouse gases, but ignoring the
climate crisis will undoubtedly damage prospects for sustained growth. Pro-
environmental change is both necessary and possible, and Stern's prescriptions included
greater international co-operation in four areas:
•
emissions trading and carbon pricing;
•
innovation in low-carbon technologies and effective cooperation;
•
actions to reduce deforestation; and
•
adaptation (for example, new crop varieties).
