ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

And I'm Melissa Block.

This century, climate change could bring on a global economic disaster not unlike the Great Depression. That warning today in a new report from the British government. It says taking serious action against climate change will have a cost, but the analysis says it's worth spending considerable money now to reduce the risk of a financial disaster later.

NPR's Richard Harris reports.

RICHARD HARRIS: Britain's Prime Minister Tony Blair has long championed taking steps to combat climate change. He commissioned the latest report last year after he had hosted the G8 Summit of industrial leaders in Scotland. Today, he said the analysis is the most important report about the future ever published under his leadership.

Prime Minister TONY BLAIR (Great Britain): It is not in doubt that if the science is right, the consequences for our planet are literally disastrous. And this disaster is not fit to happen in some science fiction future many years ahead, but in our lifetime.

HARRIS: The economic disaster foreseen in the report is due to the likelihood of crop killing droughts, the spread of tropical disease and coastal flooding as sea level rises. Most of climate change is driven by the burning of coal, oil and natural gas, which puts carbon dioxide into the atmosphere. This analysis finds that to avert potential disaster, we will eventually need to reduce so-called greenhouse gas emissions by a staggering 80 percent.

Sir Nicholas Stern, who is the primary author of the 700 page report, says it makes economic sense to get started now.

Sir NICHOLAS STERN (Stern Review on the Economics of Climate Change): We've got a window of 10 or 15 years in order to get going and act strongly. And the later we delay it, the more these things accumulate in the atmosphere, it's very difficult to get them out, so that the later we leave it, the more difficult the problem.

HARRIS: Stern was once the chief economist at the World Bank, so it's not surprising his recommendations are similar to what many economists have been suggesting for years. The key is to create strong incentives to move away from carbon based fuels. The way to achieve that is to put a price tag on carbon dioxide emissions. Stern says that could mean a carbon tax, higher fuel efficiency standards, as well as a trading system so companies can buy and sell the right to put carbon dioxide into the atmosphere.

Sir STERN: The figure that we think to cut back from where we are now as a world by 2050 would be around 25 percent. That does mean though that those things like producing electricity would have to cut back by more than that. Because there's some areas, like transport, which probably will take a little longer to cut back.

HARRIS: Right now, the trend is exactly the opposite. Globally, there is an increase in emissions. That's true from the United States, as well as from China's rapidly growing economy and even from Europe, which is attempting to reign in its emissions under the Kyoto Climate Treaty.

Robert Stavins at Harvard University's Kennedy School says reversing that trend will be tough. It will require convincing the world not to use cheap and abundant energy resources, particularly coal.

Professor ROBERT STAVINS (Harvard University): The reality is there are tremendous coal resources in the United States and in China and in India and in other countries. It's difficult to picture in a short to medium term those coal resource being abandoned. China is now building a large scale coal fired power plant once every week.

HARRIS: It might be possible to burn coal and capture carbon dioxide before it ends up in the atmosphere, but that would cost a lot more. And Stavins says in any event, it's not easy to motivate people to spend money on a problem they can't see right now.

Professor STAVINS: Selling it is exceptionally difficult and I think sometimes we've done damage to our cells in this vein by pulling ourselves into thinking there's going to be a lot easier than it is.

HARRIS: The British report isn't likely to change a lot of minds, Stavins says. That's because even the best economic projections about climate change are fought with uncertainly.

But author Nicholas Stern says the plan he's put forth would cost about one percent of the world's total income each year, so this I not asking the nations of the world for a huge sacrifice.

Sir STERN: There's absolutely no reason why this should stop anybody's growth. It just means doing some important things in life a little bit differently.

HARRIS: Stern says the first step is to convince governments around the world, including the reluctant United States, that they should share a sense of urgency about global warming.

Richard Harris, NPR News.

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