Avoiding “dangerous” impacts

Avoiding “dangerous” impacts

An alternative set of targets considered by the IPCC would imply stabilizing GHG concentrations at levels between 535 and 590 ppm CO₂e. The cost of achieving these targets would be lower than for the more stringent targets mentioned above—up to 2.5 percent of global GDP in 2030 and 4 percent in 2050—but expected temperature increases would be slightly higher—between 2.8°C and 3.2°C.

Note, however, that given the large uncertainties involved, much higher rates of warming would still be possible (albeit improbable), even if the above targets were met. The expected level of global warming for the second group of targets, for example, could increase to almost 5°C if one were to use the more pessimistic available estimates (instead of the mode) for the so-called climate sensitivity parameter.⁴³ Similarly, Stern (2008) estimates that for a stabilization target of 550 CO₂e ppm there would be a 7 percent probability of temperature increases above 5°C, which could potentially lead to the melting of most of the world’s ice and snow, as well as to sea level rises of 10 meters or more, and losses of more than 50 percent of current species.

Effectiveness and efficiency call for developing country participation

Developing countries’ participation, however, would be needed not only to guarantee effectiveness but also to ensure that stabilization targets are reached efficiently, that is, at the least possible global cost. Assume, for example, that by 2030 a global uniform price of carbon of US$100 per ton of CO₂e, was the outcome of a global “carbon tax” or a “cap-and-trade” scheme. As shown by the IPCC, this would lead to sufficient emission reductions to stabilize GHG concentrations in the range of 445 to 535 ppm CO₂e.⁴⁵ While these mitigation investments would be spread across many sectors, in most of them (the only exception being transport) more than 50 percent of the global mitigation potential would be located in developing countries. In fact, in the cases of industry, agriculture and forestry, almost 70 percent of the global potential for reducing emissions comprises opportunities in developing countries.⁴⁶

Clearly, developing countries’ engagement is indispensable if those targets are to be met and so strong incentives to become part of the solution are in everyone’s best interest. This approach would ensure that the world takes advantage first of those mitigation opportunities that offer the largest “bang for the buck.” In other words, a globally efficient solution is only possible if reductions take place in countries which have the greatest potential for low-cost reductions, not necessarily where emissions are the highest. The global savings from such an efficient solution would be large. A recent study, for example, finds that reducing global emissions by 55 percent in 2050 globally—relative to a baseline business as usual path—would cost 1.5 percent of global GDP using a uniform carbon tax. The same global emission reduction implemented in such a way that each country cuts its own emissions by 55 percent—would cost 2.6 percent of global GDP, or about 73 percent more than when using the more efficient approach.⁴⁷

The need for the global response to be equitable

Second, industrialized countries carry a much larger historical responsibility for the existing GHG concentrations that are driving climate change. The lower level of responsibility of developing countries can be illustrated by the fact that the cumulative energy related emissions of rich countries from 1850 to 2004 are, on a per capita basis, more than 12 times higher than those of developing countries—respectively 664 and 52 tCO₂ per capita.⁴⁸ Thus, even though their share of the world’s population is only about 20 percent, industrialized countries are responsible for 75 percent of the world’s cumulative energy related CO₂ emissions since 1850. This leads many observers to conclude that rich countries should assume a much larger share of the cost that will be associated with reducing global GHG emissions.

The relatively small contribution to cumulative emissions of even some of the largest developing countries is illustrated in figure 6. It shows that emissions grew with income at much faster rates when today’s rich countries were industrializing than has been observed in recent decades in China, India, Brazil, and Mexico. In other words, thanks to technological change, development has already become much less carbon-intensive than it was in the past.

Figure 6. Historic Trends in per Capita GDP and per Capita CO₂ Energy Emissions



Source: WB staff calculations using data from Angus Maddison and WRI.