MADELEINE BRAND, host:
Back now with DAY TO DAY.
From the British government today, a new and alarming report on global warming and it's economic impact. Steve Tripoli from Marketplace joins us now.
And Steve, what's in this report?
STEVE TRIPOLI: Well, Madeleine, the main message is that action on global warming is needed now and that not acting now could be extremely costly. You know, Madeleine, British Prime Minister Tony Blair has differed with the Bush administration on this issue for some time. The U.S. government downplays the risk of global warming and refused to sign international climate change agreements. But Blair was hammering home the urgency of the threat today as this report was released.
Prime Minister TONY BLAIR (United Kingdom): It is not in doubt that if the science is right, the consequences for our planet are literally disastrous. And this disaster is not set to happen in some science fiction future many years ahead, but in our lifetime.
BRAND: Okay, Steve, so there is some urgency from the prime minister. And in this report, saying action is needed immediately. What does the report say about the economic consequences if nothing's done?
TRIPOLI: Well, let's weigh out the cost of acting first. The report says that there can be deep cuts in global warming emissions, but they won't be cheap. The cost will be about one percent of world economic output over the next 40 years or so, which the report characterizes as manageable. But that's especially manageable in view of the projected costs of inaction in the report, which says that a global warming crisis could slice from five to 20 percent off global economic output.
Now, any economist will tell you that even a five percent drop means a very painful recession. At the upper end, a 20 percent drop in output would trigger what many folks would call a worldwide depression.
BRAND: And I understand this report is quite hefty, some 700 pages. What steps does it outline to prevent this?
TRIPOLI: Well, you may recall that just three months ago, we spoke on the show about Tony Blair announcing that the British government and the state of California agreed to jointly cap their carbon emissions. It's what is called a carbon trading market. Today's report calls for the development of an international carbon trading market. And the way this works - and such markets already exists in some places - is that polluters essentially are resigned an individual emissions cap. If they pollute less than they're allowed, they can sell the rights to that extra pollution and pocket the money. So other companies don't want to pay extra by exceeding their caps, so they'll work to be cleaner too. There's also a call on this report for more investment in research on cleaner energy technologies. That's another area where the United States lags even his own past performance, the amount of research dollars devoted to that.
BRAND: And we heard the dire warning from Prime Minister Blair. How bad is the problem likely to be, according to the report?
TRIPOLI: Well, the report gives some cause for optimism. The finance minister, Gordon Brown, says that there's not a choice between economic growth and action on climate change. He says you can have both. And there may be worse impacts that can be avoided as well if we act now, says the report.
On that note, Madeleine, later today on Marketplace we'll visit Nigeria, one of the most important oil exporters to the U.S., and we'll learn why that important country maybe on the brink of falling apart.
BRAND: Thank you, Steve.
Steve Tripoli of Public Radio's daily business show, Marketplace. And Marketplace is produced by American Public Media.
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