Steve Hutcheson

August 9, 2009

The 38 billion dollar bet

Filed under: Economics, climate — Tags: , , , , , , , — Steve Hutcheson @ 11:59 pm

In this months Quadrant, an Australian  journal that tends to push a conservative line on most things has published an article that includes comments by a number of scientists and commentators on what they see as the fallacy of the climatic change occurring due to mans presence on earth.  Maybe they are right but then again, maybe they are wrong.

In another article perhaps not as scientific but more related to the financial impact of climate change, that impact is being calculated. It would seem that if we can believe the likes of the National Oceanographic Data Center, a division of the National Oceanic and  Atmospheric Administration, both US organizations whom are tasked with collating information around the world, the average heat content of the worlds oceans are heating up. The following is their graph showing the rise in the contained heat over the years.

It would seem however that the rise in the sea water temperature also has a deleterious effect on the ocean’s coral reefs, and none more so than the Great Barrier Reef along the north eastern coastline of Australia. In a recent report commissioned by the Great Barrier Reef Foundation, a business-backed body investing in science, estimates half the tourists drawn to see reef coral will stay away if projections of permanent bleaching prove correct.

Their estimate is that the it will cost Australia almost 38 billion dollars if the bleaching of the reef takes place, which is the value placed on the tourism and eco-industries that rely upon it remaining as it is.

I am not particularly swayed one way or the other by the various arguments. I liken it to the dispute between the Christians and the atheists, in that case neither can substantiate their position. In the case of weather however, there seems to be a lot of supporting information to suggest that there is a shift in climatic conditions. Whether it is merely nature taking its course or it is in fact, the result of man pumping billions of tons of pollutants into the atmosphere over the last century is a matter of conjecture.

In one instance, there is not a lot we can do about it, in the other however, there is. Much is made by those who argue against the rise being man made about the high cost we are going to be faced with if we are obliged to trade carbon dioxide production or for industry to invest in new technologies to take over the existing ones. Theirs seems to be a an extremely self interested motivation to do nothing, “am I going to have to pay more for my transport” sort of argument? While on the other hand, those that are arguing for change to take place also often have a self interest in securing funding in research or promotion of green technologies. Yet it is advances in technology that the world requires sooner rather than later. The idea that fossil fuels are endless is to disregard reality.

On the other hand, we can live with research into new processes for the production of power or ways that we go about our business. Five hundred years ago all they had was fire, now we have electricity that can be created from the sun. My first cell phone cost me one hundred times what I can pick one up for in a market now. It is not cheap however these new technologies are getting cheaper and will continue to do so as usage increases. As I am writing this, advances in the production of solar cell material, increased output of this material in new factories in China, a saturation of the solar market has caused the price of solar power to drop by some 40% in the past year alone.

There is also the criticism that imposing taxes on dirty production will cause job loss yet those that argue this fail to acknowledge that the recent financial crisis has caused more job loss world wide than would be possible though these new measure introductions. That argument is puerile and lacking substance in the long term.

What we can’t live with is the consequence of doing nothing until we leave it go until we reach the point where it is all too late.

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