27 January 2009

Report: Cost of rapid CO2 cuts "manageable"

By Aofie White, AP in Yahoo News, Mon Jan 26, 10:20 am ET

BRUSSELS, Belgium – Rapidly reducing greenhouse gas emissionsover the next decade to curb global warming could cost less than 1 percent of world gross domestic product by 2030, a report frommanagement consultants McKinsey & Co said Monday.

"Globally financing and costs look manageable," the report sponsored by environmental campaign group WWF said, putting the price at euro200 billion ($256 billion) to euro350 billion ($448 billion) annually by 2030 when they calculate total world GDP to hit euro60 trillion (US$77 trillion).

Taking action will mean additional investments of euro530 billion ($678 billion) in 2020 and euro810 billion ($1.04 billion) in 2030, the experts said — claiming much of these high upfront costs would be regained byenergy savings later on.

"The net cost could end up below 1 percent of global GDP," they said.

The authors said they worked with 10 large corporations — including energy companies Shell and Vattenfalland car maker Volvo — as well as nonprofit groups to calculate how the world could cut enough CO2 to keep global warming below 2 degrees Celsius (35.6 Fahrenheit).

They advocate massive energy savings by making vehicles, buildings and machinery far more efficient — saying this could eventually halve global electricity demand.

British economist Nicholas Stern estimated in 2006 that unabated climate change would eventually cost the equivalent of between 5 percent and 20 percent of global GDP each year.

The United Nations will hold climate change talks between world governments in Copenhagen later this year to try and strike a new global pact to reduce greenhouse gas emissions. The United States refused to join the last global effort to curb global warming, the Kyoto Protocol.

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