Features Bureau

New Delhi, Dec 6: It is time when the ongoing debate on climate change must conclude and we take into consideration the economic loss it can lead us to if we don’t act fast. With each passing month of the calendar giving us new findings on the subject, the latest data India has seen talks about the economic dimension of climate change.

To elaborate, based on simple extrapolations, the costs of extreme weather alone could reach 0.5-1% of world GDP per annum by the middle of the century, and will keep rising if the world continues to warm, informs The Economics of Climate Change. Written by the head of the Government Economics Service, UK, Nicholas Stern, the report was launched in the Capital on Wednesday.

Speaking at a function organised by the Confederation of Indian Industry, Nicholas Stern also encouraged the Indian industry to follow the path taken by companies like HSBC in becoming carbon neutral and lead a respectable corporate life.

“This is, however, besides the benefits of clean development mechanism (CDM) which can give developing nations profits. One of the ways to ensure that rich and poor countries equitably share the costs of mitigating climate change is to accelerate the flows of finances through the CDM.

This has to be in the region of $20 billion a year; and I must say the market is still evolving,” he said, added, mitigating climate change will create enormous, new business opportunities, estimated at $500 billion.”

In his paper, Stern suggests that the carbon dioxide (CO2) concentrations in the atmosphere have to stabilise between 450 and 550 parts per million (PPM), over the next two decades. This will imply a 50% probability of a 3-4°C increase in average temperatures.

In India, it is estimated that a temperature rise of 2 - 3.5°C will lead to a loss of 20% in revenue from agriculture. This will reduce GDP growth by 0.67%. A 100 cm rise in sea levels will shave 3-6% off the country’s GDP.

Climate change will also impact health across the country by frequency of extreme climatic events going up. The good news here is that energy intensity of the industry in India has declined over the past 20 years.

Suggesting it to be a beginning, Stern recommended nations to have policies to mitigate its impacts before it’s too late. “Countries need to evolve policies to mitigate its effects with a carrot-and-stick approach to reduce carbon-intensive development and growth.

Like, carbon pricing via taxes or trading, enforced through regulation, can pay for environmental damage,” he said, adding that countries need to bring forward research on lower carbon technologies.