One per cent of GDP will save the climate

A new study shows that global warming can be kept below the critical 2°C rise at a cost of well below one per cent of the global gross domestic product (GDP).

A new study by McKinsey and Co shows that global warming can be kept below the critical 2°C rise and that it is well within our means to do so. The study spells out in detail the costs of cutting damaging carbon emissions, but makes it clear that only by acting now will we avoid the worst impacts of climate change.

“Every year of delay adds to the challenge, not only because emissions will continue to grow during that year, but also because it will lock the economy into high-carbon infrastructure,”
said the report.

The report lists more than 200 opportunities, spread across ten sectors and twenty-one geographical regions, which could cut global greenhouse gas emissions by about 40 per cent below 1990 levels by 2030.

By 2030, wind, solar and other sustainable renewable sources of energy could provide almost a third of all global power needs. Energy efficiency could reduce greenhouse gas emissions by more than a quarter, and deforestation in developing countries – one of the biggest drivers of climate change and a major threat to sustainable development – could be almost fully halted. And all at a cost of less than half a percent of the world’s Gross Domestic Product (GDP), a measure of the market value of all goods and services.

“The McKinsey study shows once and for all that taking action on climate change is both urgent and affordable,” said WWF director James Leape. “The figures show clearly that not only can we move to a low-carbon economy, but that the costs are manageable. Adopting these measures will be a major step towards avoiding the worst effects of climate change.”

Findings are presented in the form of an “abatement cost curve” which graphically illustrates the sectors where the most cost-effective carbon reductions can be made, including saving 14 billion tonnes of CO2 by replacing carbon-based power generation with – amongst other things – existing and proven clean, renewable energy; 14 billion tonnes through more sustainable use of land in the agriculture and forestry sectors; and 11 billion tonnes from energy efficiency. Another 9 billion tonnes of potential emission reductions are identified, which either are more expensive or represent behaviour changes that are difficult to quantify.

McKinsey analyses the potential for emission abatement across all sectors including nuclear power. WWF believes however that the costs for nuclear have been underestimated, and moreover states that nuclear power is not a viable option when the risks from proliferation, highly radioactive waste and plutonium leaks are taken into consideration.

In addition, WWF believes that further substantial reductions are possible from combined heat & power (CHP) biomass, better energy efficiency, and low-carbon products which will protect the climate without the need for nuclear power.
If all the technology options listed in the study were put into practice, it would be possible to achieve a global reduction of approximately 40 per cent of greenhouse gas emissions by the year 2030 compared with 1990 levels – which equates to a 70-per-cent reduction from “business as usual” levels. That would be enough to put the world on track to keep global average temperature rises below the 2°C level which has been identified as the maximum allowable before widespread irreversible environmental damage kicks in.

Source: WWF press release, 26 January 2009 http://www.panda.org/
The report Pathways to a Low Carbon Economy was supported by ten global companies and organizations: The Carbon Trust, ClimateWorks, Enel, Entergy, Holcim, Honeywell, Shell, Vattenfall, Volvo, and WWF. It can be downloaded from: http://globalghgcostcurve.bymckinsey.com/

In this issue