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'Doing nothing costs more than doing something'

As experts discuss the climate at the UN conference in Warsaw, Gunnar Luderer of the Potsdam Institute for Climate Impact Research tells Deutsche Welle that delay will be expensive.

DW:In 2006, the British economist Nicholas Stern was the first to actually put a price on the costs of climate change and the costs of doing nothing about it. Those were impressive numbers, the world was surprised, but nothing has changed since then. Now, there is a climate conference taking place in Warsaw. This conference too is about taking action. However, once more the biggest fear is that not much or nothing will happen. Now you have recalculated the costs of taking no action. What are your results?

Gunnar Luderer: The current situation regarding international climate policy could be seen as somewhat schizophrenic. On the one hand we have a long-term climate goal on which the world community has agreed: limiting global warming, the rise in the average global temperature of our planet to two degrees Celsius compared to the temperature in preindustrial times. On the other hand we have the individual contracting states which laid down plans for emission reduction targets which are not sufficient to bring the world on to a path which will lead to that two degree target.

The sooner the better

If this climate policy continues as it is, then we are moving towards a global warming of at least three to four degrees Celsius over the next century. But if the world community is serious about the two degree target, then the costs depend very considerably on when the world community manages to reach a climate agreement with binding emission reduction targets for all parties. We have worked it out with a big model including the climate and the energy economy, and we've found out that the cost of achieving this goal will increase substantially if we do not manage to get such a climate agreement over the next five to ten years.

Could you explain this a little bit more? The long-term goal is too far away for many people. People are much more responsive to immediate concrete risks. Only when there's a concrete fear do people start acting. So, tell us about the costs if we act quickly.

If we act quickly, the cost of protecting our climate will be less than 2 percent of the world economy, especially when we make optimistic assumptions regarding the availability of technology, and that we'll have a variety of technologies available.

Controversial technologies

Renewable energies are particularly important but biomass, for example, will also play an major role. There are other, controversial technologies, such as nuclear energy, which is very controversial in Germany. Or there's Carbon Capture and Storage, where CO2 is taken from the power plant emissions and compressed into the ground. This is also very controversial. But if we look at the whole spectrum of different technologies then we're talking about 1 or 2 percent to prevent the CO2 - but only if we act immediately.

If we don't, we would need a very, very substantial reduction in emissions if we were still to reach the two degree target. And such a radical reduction would involve a radical increase in the cost. We would have to accept a decrease in global economic growth similar to what we saw in the financial crisis of the last few years.

You said that it will cost us 2 percent of worldwide economic output if we start soon and more if we start later. So one could respond, it'll cost us either way, but we'd have longer to save up towards the hard times ahead.

That's a crucial point. The decisions we are making in climate policy now decide how the costs will be distributed over time. It's true: protecting the climate costs money. However, the money which we invest in the climate now is less than the cost of the potential damage that we would do if there were no climate policy. It's also true that it's hard to express the potential damages to the climate in euros and cents.

You have to remember that, if we carry on as we are and we end up with global warming of three to four degrees, we would find ourselves in a radically different world from the one we have come to know. The damage that would result is not something you can measure in money. It will be about issues like the cultural identity of entire island nations, or the survival of very big ecological systems. And it is very difficult to put a price tag on these.

Gunnar Luderer is a senior researcher at the Potsdam Institute for Climate Impact Research and was lead author of a report into the costs of delaying climate change.

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