Carbon emissions costs set to rise four-fold over next 40 years - Lehman report |
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Wed, 31 Jan 2007 23:17
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LONDON (AFX) - The economic repercussions of climate change are set to worsen, with the cost of carbon emissions to quadruple over the next forty years, a Lehman Brothers report said.While conceding that forecasting the costs of climate change is a difficult task, the report said the price for carbon through emissions taxes could rise from 20 usd per tonne today to over 80 usd by 2050.The failure of free-market policy to limit climate-damaging emissions sufficiently, means that policies -- consisting of volume targets, technology, and regulation -- have a key role, the report said.The authors of the report see a greater than 50 pct likelihood that some sort of global emissions trading system will be in place within five years.This echoes points made in the Stern report, commissioned and published by the UK Treasury in October, which called for a global price for carbon as well as a tax rate or emissions trading quota target.The Lehman Brothers report said it is important that the costs of such regulations be as close as possible to the value of damage avoided.'The price mechanism should therefore be a central component of policies to reduce emissions,' the report said.According to its own calculations, a rise of two to three degrees Celsius in the Earth's temperatures would cost up to 3 pct of global GDP annually, with poor countries affected disproportionately.'While climate change may well be a slow-moving force, asset prices will on occasion move sharply, when new evidence reaches the market, or policies are changed,' the report said.It added that the most affected industrial sectors would likely be utilities, gas and oil, mining and metals, insurance, pharmaceuticals, construction and real estate.carlo.piovano@thomson.comcp/ss/rwCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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