234 Weighingthe uncertainty
by a factor of about three while a five per cent rate discounts by a factor
of thirteen. Over one hundred years the difference is even larger – a fac-
tor of seven for a two per cent rate and a factor of 170 for a five per cent
rate. Amongst economists there has been much debate but no agreement
about how to apply discount accounting to long-term problems of this
sort or about what rate is most appropriate. However, as Partha Dasgupta
points out,^12 ‘the disagreement is not about economics nor about social
cost-benefit analysis nor even about the numeracy of fellow scientists’.
He explains, for instance, that the effects of carbon emissions could make
substantial negative perturbations on future economies thus threatening
the basis on which discount rates for future investment are set. Further,
there are the likely damages that cannot easily be valued in money terms
such as the large-scale loss ofland – or even of whole countries – due
to sea level rise or the large-scale loss of habitats or species. For these,
even if valuation is attempted, discounting seems inappropriate. There
seem cogent arguments that, if discount rates are applied to cost esti-
mating for climate change, a smaller discount rate rather than a larger
one should be employed. And in any case, for any cost estimate that
is made the discount rate used should be adequately exposed. For our
broad economic arguments in later chapters we shall therefore quote an
estimate of damage cost in the range $US 50 to $US 100 per tonne of
carbon emitted as carbon dioxide.
To slow the onset of climate change and to limit the longer-term
damage, mitigating action can be taken by reducing greenhouse gas
emissions, in particular the emissions of carbon dioxide. The cost of
mitigation is very dependent on the amount of reduction required in
greenhouse gas emissions; large reductions will cost proportionately
more than small ones. It will also depend on the timescale of reduction.
To reduce emissions drastically in the very near termwould inevitably
mean large reductions in energy availability with significant disruption
to industry and large cost. However, more gradual reductions can be
made with relatively small cost through actions of two kinds. Firstly,
substantial efficiency gains in the use of energy can easily be achieved,
many of which would lead to cost savings; these can be put into train now.
Secondly, in the generation of energy, again proven technology exists
for substantial efficiency improvements and also for the bringing into
use of renewable sources of energy generation that are not dependent on
fossil fuels. These can be planned for now and changes made as energy
infrastructure, which has a typical life of thirty years or so, becomes
ready for replacement. The next two chapters will present more detail
about these possible actions and how they might be achieved.
Our purpose here is to look briefly at the likely overall cost of miti-
gation, much of which will arise in the energy or the transport sectors as