The war is over: prepare for battle
4 February 2011 – So the climate change argument from Canberra has changed from a moral one to an economic one . Good. Money speaks loudest in high places.
In any case, the moral argument, “greatest of our time blah blah blah”, didn’t survive past the podium of its first outing, that we can recall.
For now, Julia Gillard has started talking about the economic opportunity of pricing carbon and cutting emissions. Next – trotting briskly alongside – will be the economic cost of continuing to repair damaged infrastructure (possibly over and over) and the cost to people’s lives and the GDP from climate change. That’s what the flood levy was really about.
The cost of rebuilding the infrastructure in Queensland, as so many commentators have pointed out, was peanuts and could have been easily met within the $314 billion yearly tax take. In fact, its real role is to be the pea beneath the mattress that will disturb our good night’s sleep, and remind us of what’s to come.
But what is ahead? The weather forecasters, now fondly referred to on familiar terms as the BOM (Bureau of Meteorology) say hold onto your hats, it’s not over yet. The disaster people say hide in the lowest, toughest points of the house as long as the house is not at the highest point in the area if there’s a cyclone, and not in the lowest point if there are floods, and neither on the slopes or the peak of a ridge if there are bushfires.
Just try asking the authorities or the experts or the academics what the best course of action should be now.
In his follow-up piece to the floods special report last issue, (which quickly shot to the top of our most read stories with an average read time of 5.05 minutes, by the way), Leon Gettler searched the country for a plan of action, a framework that could tell us how to rebuild damaged Queensland and inform new construction elsewhere. It was tough going.
The best argument in Gettler”s follow-up came from Peter Williams of MWH. He says we are wasting our time and money if we think we can dominate natural forces.
“If you design for invulnerability, you have a difficult proposition,” he says. “It becomes a very expensive exercise and it becomes problematic as to whether you can make infrastructure invulnerable.”
A better solution would be to design for some inevitable impact but create a resilience that would ensure less impact and quicker recovery.
In general, it seems we’re caught a bit off guard. There are some organisations formed to consider resilience, but in theoretical, far-off ways. Standards Australia is writing a public standard for some sort of disaster-proof construction – we think – but they won’t tell us about it.
(Now why is that not a surprise: the people who do good work for public, government bodies and government-funded bodies everywhere tend to be locked behind Fort Knox public relations barriers, so that we only get spin-cycled, airbrushed versions of nothing, really.)
The Property Council’s Peter Verwer says we need to map all our settlements and develop adaptation and mitigation, such as are underway elsewhere in the world.
How we handle adaptation will raise a whole new set of problems we haven’t begun to think of yet.
Question: if the planet goes down, do the rich go down? If so, at what speed?
In its 25 November issue last year, The Economist proclaimed that the fight to stop global warming was over; we had better start planning to adapt to it.
“The best starting point for adaptation is to be rich,” it said in a major feature on the facts and likely scenarios.
Now that this esteemed publication, tailored to the world’s elite, has bought into the argument, maybe we can all start to get on with some public policies to build levees, and get on with the levies.
Where was The Economist 20 years ago, when we might have still had a chance?
Shame and shame again on economists and their pathetically narrow-framed views of the world that cling stubbornly to measuring only what appears on the balance sheet and dividend statements this year or next. A simple extension of time frame and a reality check on profit guidance would do wonders, for their corporate clients alone.
As Gettler pointed out in his weekly column for The Age, (we point to it here) a host of public companies failed on their profit guidance because they did not factor in climate risk, and have been hammered by the Queensland floods. On pure prudential terms, this could soon be considered irresponsible, and should scream loudly to bean counters to start to widen their view of what a cost is and where it’s likely to come from.
If you want to play economics that’s fine. Just play it properly.
The war is over: prepare for battle
Here are some highlights from the The Economist’s outlook:
- International Energy Agency says the likely scenario puts the world on course to warm up 3.5°C by 2100. For comparison, the difference in global mean temperature between the pre-industrial age and the ice ages was about 6°C. The fight to limit global warming to easily tolerated levels is thus over.
- Many of these adaptations are the sorts of thing – moving house, improving water supply, sowing different seeds – that people will do for themselves, given a chance. This is one reason why adaptation has not been the subject of public debate in the same way that reductions in greenhouse gas emissions from industry and deforestation have. But even if a lot of adaptation will end up being done privately, it is also a suitable issue for public policy.
- For a start, some forms of adaptation – flood barriers, for instance – are clearly public goods, best supplied through collective action.
- Adaptation will require redistribution, too. Some people and communities are too poor to adapt on their own; and if emissions caused by the consumption of the rich impose adaptation costs on the poor, justice demands recompense.
- Some forms of adaptation will be hard to distinguish from the sort of impact you would rather avoid. Mass migration is a good way of adapting if the alternative is sitting still and starving; to people living where the migrants turn up, it may look awfully like an unwelcome impact.
- More than half the world’s people live in cities already. Three-quarters or more may do so by mid-century. Encouraging this trend further, at least in some places, may be a useful way to reduce the economy’s exposure to climate change.
- City dwellers’ emissions per person tend to be lower, and the more planners can do to increase population density the better. Protecting a single port city from floods is easier than protecting a similar population spread out along a coastline of fishing villages (though when things go wrong disasters can be correspondingly larger and harder to address). Cities have higher rates of innovation and of developing new businesses, business models and social strategies, formal or informal.
- Rich countries can show, through their own programs for flood defence, zoning laws, sewerage and so on, that adaptation must be a part of the mainstream of political and economic life, not an eccentric and marginal idea.
- A 2009 review of the cost of warming to the global economy suggests that as much as two-thirds of the total cannot be offset through investment in adaptation, and will be felt through higher prices, lower growth and misery, regardless. But adaptation can still achieve a lot.
- The best starting point for adaptation is to be rich. It is not foolproof: not even the rich can buy off all hazards, and rich countries and individuals will make poor decisions. The need to restrict farming with subsidised water in a drier south-western United States does not mean that the political means of doing so will be found before damage is done. But wealth buys information (a lot of people are studying what to do in the south-west) and it opens up options.
- If the world contrives to keep feeding itself without too much ecosystem damage, many of those dependent on agriculture or in poverty could still suffer a great deal. Regional droughts could wreak havoc, with bad ones causing global surges in food prices.
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