Action now on climate change makes economic sense

Professor McGlade was speaking after the launch of 'Mitigation of Climate Change', the third in a series of reports from the Intergovernmental Panel on Climate Change (IPCC). The report, written by a panel of international scientists on behalf of the UN, focuses on measures to counter climate change.

'We have seen the cost of inaction in terms of people's lives and our environment in the past with examples such as the collapse of fish stocks, the use of asbestos in buildings, acid rain and lead in petrol. It pays to act now to secure the long term', she said.

The IPCC report stresses the urgency of the situation, estimating that there are only two decades to implement effective greenhouse gas reduction measures to control and limit global temperature increases.

The largest emission reduction potential is in increased energy efficiency in electricity and heat generation, in building insulation and by substantially expanding renewable energy. Investments in energy supply in developing countries, modernisation of energy infrastructure in developed countries and policies to increase energy security create opportunities to achieve emission reductions, the report says.

Technology, existing as well as new innovations, will also have a key role to play, according to the IPCC. However, these technologies will only thrive if appropriate incentives are created and investments in research and development are increased.

'We need to create the right economic environment with the necessary incentives leading to more investment in competitive, environmentally friendly technologies. We have already seen this approach working. For example, strong taxation of petrol in Europe and high regulatory standards led to cars that have been almost twice as fuel efficient as cars on America's roads, in recent decades', Professor McGlade said.

The IPCC report also stresses the need to establish an effective, global emissions trading scheme, which would set a realistic price on CO₂ emissions. This will also help create incentives for producers and consumers to invest in products, technologies and processes with low or zero emissions.

A broad range of instruments — standards, taxes, charges, tradable emissions permits, voluntary agreements — are available to establish markets for low CO₂  or zero emission technologies, according to the report.

'The EEA has long advocated a gradual shift away from taxes on labour and investment towards taxes on pollution and the inefficient use of materials and land. We also need reforms in the way that subsidies are applied to transport, housing, energy and agriculture. We need subsidies encouraging sustainable practices and efficient technologies', Professor McGlade said.

For more information on climate change and market-based instruments, please see the following reports:

Climate change and water adaptation issues

Vulnerability and adaptation to climate change in Europe

Using the market for cost-effective environmental policy

You can visit the IPCC homepage here: http://www.ipcc.ch/