The main surprise for me was to see how clearly some of the other economists speaking there, like Warwick McKibbon, David Pierce, and Henry Ergas, were skeptical about the prospects of serious coordinated international efforts to reduce carbon emissions.
The message of my presentation was that it is time to get more serious about adaptation. The synopsis of my presentation is over the fold.
The world is getting warmer and wetter, almost undoubtedly due to the fact that we are burning up fossil fuels at an incredible rate. Whilst this change in our climate will lead to some positive opportunities, such as wine growing in Tasmania, our natural and social habitat is not accustomed to changes that are this rapid and we should hence expect a significant loss of biodiversity and human infrastructure if we cannot halt climate change.
There are those that believe that we can avert climate change by repenting of our sinful energy-guzzling ways. They advocate an increased cost of activities that lead to carbon emissions in the expectation that this will gradually become normal throughout the world, eventually leading us to new technologies that will make humans more carbon neutral. They expect small-step policies, like the one the Australian government is planning to implement in 2012, to be instrumental in getting towards long-term changes in our use of energy.
Then there those like myself who see no hope whatsoever in reducing emissions. Most of the rest of the world simply doesn’t worry enough about the climate in coming decades and centuries to make the radical adjustments asked for. The scenario I see unfold is for the world to more or less go through the cheapest means of energy first, only using the cleaner energy as the more polluting but cheaper forms have run out. For sure, I also hope for technological breakthroughs, but having seen no major new technology in the last 50 years that comes close to out-competing coal and oil, I am not holding my breath that the magic technological fix is around the corner.
So if you fully expect the climate to change and think of policies surrounding carbon emissions as feeble symbolic gestures, does this mean you want to do nothing? The answer is no. If you are desperate enough, you try geo-engineering fixes that do not require massive and sustained coordination. Otherwise, what you do if there is a problem you can’t fix is that you learn to live with it and adapt to it such that you minimize the loss and maximize the gain.
Let us remind ourselves what we are adapting to. As a rule of thumb, in the course of 10 years we are talking about a warming of 0.1 degree Celsius, an increase in sea levels by 5 centimetres, and about a 0.5% increase in rainfall per 10 years. Ocean acidification and the melting of the ice caps make up even slower changes in our climate. On reflection, these anticipated changes in climate are very fast from a geological point of view, but from a human point of view they are painstakingly slow. You would be forgiven for not noticing any changes in your lifetime, which is of course precisely why I deem it folly to expect the world to really get anxious about this.
For any investment that is usually written off in a matter of decades, which includes most existing housing and nearly all business investments, the slow change in climate means that taking account of climate change is irrelevant since there will be plenty of time in the future to redirect such investments when the climate is actually noticeably different. One can think of making building codes take account of a greater likelihood of floods and storms, but that is about it.
The things to really worry about are public investments with payoffs measured in centuries rather than decades. Where governments have a particular role is in fishing stocks, biodiversity, nature parks, coastal lands, and other public goods that get given down via the generations.
How can governments react to the collapse in the stocks of those fish that would disappear due to acidification of the oceans? That acidification is a serious problem, to the extent that if it goes on unchecked, we’d be in the situation in a century or so time that the shell of many marine animals would dissolve, which means the end of them and things that feed on them.
One question is whether acidification can be reversed by pumping more alkaline substances into the ocean or churning alkaline rock beds in the ocean itself. Given the amount of fossil fuels we dig up, one would need an awful lot more chalk into the oceans to balance the acidity. My understanding is that this is an active area of research where we don’t yet know if acidification can be countered by things like mixing up shelves of chalk under the seabed. A ‘coalition of the willing’ could try to churn enough calcium in the oceans to prevent further acidification and Australia could lead research and international efforts that way.
If it turns out that acidification is unavoidable, we should think of ways of preserving the biodiversity. Governments can extend the conservation areas in the oceans, can set up ‘artificial reefs’ on land that preserve some of the current marine diversity, can set up gene banks for the many current marine life species, and in various other ways can preserve as much of the marine life diversity as possible in the cheapest way possible. Some of these things, like in-land reefs, could be tourist attractions.
Apart from conservation, governments can also be more pro-active: if you take the warming and acidification of the oceans as inevitable, you can turn to the question how to re-stock the ocean with fish and other organisms that do well in warmer and more acid waters. Of course, nature itself will experiment with this, but governments can give nature a helping hand. We can try to genetically engineer new fish species or mass-raise those species which we know are more suited for the new climate. Such initiatives would of course greatly benefit from having a database of ocean life conserved somewhere. And it of course will be a case of hit-and-miss as the long history of introducing new species in Australia has shown. Learning how to engineer the fish and other marine life we want is not something we can do overnight and there is a government role in coordinating a knowledge base in that area.
Analogue to how governments have a role to play in maintaining and increasing the stock of fish, there is a role for government in maintaining biodiversity and nature parks on land. Gene banks, artificial species, artificial habitats, etc. are obvious things governments can get involved in. To some extent, we already are involved in such thing. The Australian National Botanic Gardens for instance already stores seeds of over 5000 different plants and such programs would seem worth expanding.
The main areas in which active government intervention specific to Australia would seem desirable are hence in terms of our unique natural habitats and waters. One would want to invest in our ability to re-stock habitats and to engineer species and plants capable of thriving in the new conditions. The two tasks, habitat conservation and habitat experimentation, are both long-term enterprises where the 10 billion dollars currently spent on symbolic measures would go a long way to helping us prepare for the climate changes ahead.