Global Warming Can Be Contained for $263 Billion, McKinsey Says

By Alex Morales, Bloomberg.Com, Jan. 26 2009

The world can keep global warming in check if nations ramp up spending on energy efficiency, clean power and forestry projects to at least 200 billion euros ($263 billion) a year by 2030, McKinsey and Co. said.

The investment is needed to ensure that global temperatures don’t rise by more than 2 degrees Celsius (3.6 degrees Fahrenheit) since industrialization, McKinsey said today in “Pathways to a Low-Carbon Economy.” Beyond that threshold, nations including European Union members say global warming will become dangerous.

Delegates from 190 nations aim to craft a treaty to fight climate change in December in Copenhagen. Global action covering all sectors of the economy will be needed to contain rising temperatures, New York-based McKinsey said in the 192-page report.

“Without focused and coordinated action, it is unlikely that even the most economically beneficial options will reach their full potential,” Tomas Naucler, leader of the consultant group’s Climate Change Special Initiative, said in an e-mailed statement.

Forty-seven billion tons of the 70 billion tons of greenhouse gases projected to be emitted in 2030 could be cut if governments take immediate action, McKinsey said. The annual cost by 2030 may be less than 1 percent of the global economy -- or from 200 billion euros to 350 billion euros, it said.

Fourteen billion tons of greenhouse gases could be cut by making buildings, vehicles and factory equipment more energy efficient, the study said. Twelve billion tons could be slashed by investing in wind, nuclear and hydropower as well as technology to pump carbon emissions for storage underground and biofuels.

McKinsey also said a further 12 billion tons of emissions could be removed by stopping tropical deforestation and improving agricultural practices.

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