A new report from an economic consultant estimates the true cost of preventing global warming, and prepare yourself for some sticker shock:
- Preventing global warming would cost the world economy a devastating $18 trillion (£9.9 trillion) even under the most conservative assumptions, a report out this week will warn.
The cost, equivalent to 45 per cent of world gross domestic product for a year, is much greater than any conceivable benefit, according to the report from top economic consultants Lombard Street Research.
Charles Dumas, author of the study, said: "This is orders of magnitude greater than the cost of dealing with higher sea levels and freak weather, net of land gains in Canada, Siberia and other cold areas in thousands of square miles."
The costing is based on the assumption that cutting global warming would require reducing the world's consumption of oil and energy, and that this in turn would reduce global growth by 0.5 percentage points a year for five years. The $18 trillion figure is the net present value of that reduction. Growth is then assumed to get back to its long-term rate, an estimate which the author says is very conservative and probably hugely underplays the true cost of attempting to deal with climate change.
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No serious economic cost-benefit analysis will ever recommend taking the radical steps required to prevent global warming, the Lombard Street Research study says.
Dumas said: "The proposed Kyoto treaty limits would in no way prevent global warming. In reality, nobody seriously proposes a cure for global warming, because adequate measures would cause economic catastrophe and probably world war."
No wonder that the world's top economists ranked Kyoto and other climate change measures at the bottom of the list of solutions to the world's most pressing issues.