Warning: The Next Great Depression is Predicted

A headline in today’s Sunday Observer newspaper reads, "£3.68trillion: The price of failing to act on climate change"

The figure comes from a UK Government commissioned report by Sir Nicolas Stern which warns of the  massive financial  consequences of failing to act on climate change now.  Commenting on the report Sir David King, the UK Governments chief scientific advisor said, "If no action is taken we will be faced with the kind of downturn that has not been seen since the great depression and two world wars."

The report says the world needs to spend 1 per cent of global GDP – equivalent to about
£184bn – dealing with climate change now, or face a bill between five
and 20 times higher for damage caused by letting it continue. Unchecked
climate change could thus cost as much as £566 for every man, woman and
child now on the planet – roughly 6.5 billion people.

The predictions will add to a growing belief that the government will introduce a host of ‘green’ tax increases. A
belief that will in any case be intensified by a leaked letter from the Environment Secretary, David Miliband, to the
Chancellor, in the Mail on Sunday. It proposes a range of ‘green’ tax
increases. The newspaper reports "secret plans for a multi-billion-pound package of stealth taxes on
fuel, cars, air travel and consumer goods have been drawn up by the
government to combat global warming." It goes on to add that the governments proposals would have a "dramatic impact on family incomes."

These reports also follow the European Commission admission that  the EU is not even remotely close to meeting its legally binding emissions targets agreed under the Kyoto Protcol. The admission was reported in the Guardian Newspaper just yesterday.

The target was to cut 1990 level emissions by a minimum of 8% by 2012. Now the commission predicts that the reduction will be just 0.6% by 2010, less than 10% of the target figure.

The report by Environment Commissioner Stavros Dimas highlights Austria, Belgium, Denmark, Iceland, Italy, Portugal and Spain as the worst offenders. And goes on to focus on Aviation and transport as the major causes, with Transport accounting for 22% of European emissions.

Britain is actually beating targets on emission cuts set under the Kyoto limit of 12.5% and is predicted to be able to acheive 23.2%. but Stephen Byers, the former cabinet minister and member of an expert panel of international politicians on climate change said there needs to be a global responce to Stern’s report. Stern also stresses that unilateral action will not be enough – if Britain shut
down all its power stations tomorrow, the reduction in global emissions
would be cancelled out within 13 months by rising emissions from China.

All the new and leaked reports coming within a matter of days of each other have lead UK Government sources predicting, "we are at a tipping point in terms of the debate, as we were at a tipping point in 2004/05 in terms of the science." BBC business correspondent Hugh Pym also predicts that concerns will be taken more seriously. He says of the Stern report, "the report will carry weight because Sir Nicholas, a former World Bank economist, is seen as a neutral figure. Unlike earlier reports, his conclusions are likely to be seen as objective and based on cold, hard economic act. It also may help win over skeptics in the US, where climate change has often been accused of being based on shoddy science."

PSFK hopes this is the turning point in the debate in the belief that is is better to swallow the bitter pill of a 1% reduction in economic output today, than face the impact of major economic surgery in the future, at a massive cost to the world as a whole.