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Asia and Africa: Living on the Edge

Jeffrey Sachs

Jeffrey Sachs

Jeffrey Sachs A leading authority on international economics and sustainable development.

A leading authority on international economics and sustainable development, Jeffrey Sachs has been an outspoken proponent for addressing the problem of human-induced climate change. He is the director of The Earth Institute and professor of Health Policy and Management at Columbia University, as well as a special advisor to United Nations Secretary General Ban Ki-moon. Here, Sachs talks with FRONTLINE/World producer Martin Smith about what’s needed to address the urgent issue of global warming.

When did you get involved in the climate change issue?
I think it’s been clear to all of us as citizens that this is a serious issue, and we've known about it for many years. My own work in economic development led me to issues of how climate affects society, for instance, through tropical diseases. My focus as director of The Earth Institute and special advisor to the United Nations secretary general [is] the millennium development goals to fight poverty - because climate directly effects the challenge of poverty, hunger and disease.

There was a meeting in July 2004 – the GE meeting. How did it come about?
I was invited by Jeffrey Immelt [chairman and CEO of General Electric] to meet with industry leaders and had a chance to speak with them about climate change at that time. It was an interesting and exciting invitation.

At that meeting, Mike Morris of AEP [American Electrical Power Co.] stood up and asked you some pretty hard questions.
A number of CEOs asked me very straightforwardly, "Is this real, Professor Sachs? You think this is a real issue?" The question wasn't posed as a debating point. It wasn't posed with animus. It was actually a legitimate surprise and questioning.

I realized, at least for some of them, they were getting a lot of their information from The Wall Street Journal editorial page, which has been wrong on climate for forever it seems. It was a bit odd and, for me, an eye-opener.

Did they ask you why you thought it was real?
Sure. I direct an institute that includes some of the world's leading climate scientists, and I convey to them what I hear. I'm not a climate scientist myself, of course. But I work with dozens of climate scientists and hundreds of earth scientists. And they're studying this day in, day out with the most sophisticated, scientific measuring instruments. I was able to convey to the business executives some of the findings.

Were they changed, convinced?
The mood was absolutely serious. It was a very open discussion, and there has been a decisive change. By 2005, certainly 2006, the business community was saying, "OK, it's real. We get it. We don't even need to get into the deep science. We know that it's there. What should we do?”

You know, there's another way to look at this, and [I] wonder what your thoughts are about it. That is, the business community has decided that perhaps climate change is real, perhaps it's not. But legislation is going to affect them. They're getting in line and asking for clarity, so they can move forward as businessmen, as investors.
Certainly the business community knows that a regulatory framework [is on] the way. These changes are inevitable, so they are looking for clarity. But I also think that there is a tremendous change of perception, as well. I relate it to the actual climate changes we've experienced.

Hurricane Katrina was really the decisive moment in American thinking. Whether or not the specific hurricane was a reflection of long-term climate change; it certainly was a wake-up call to the dangers of extreme events of the kind that will accompany long-term climate change.

In Australia, you have one of the largest droughts in that country's history and huge destruction of crops. This has turned politics upside down. You had an administration in Australia that was absolutely antagonistic to the climate change agenda, and [then climate change] became the centerpiece of national politics.

AFRICA AT THE EDGE OF SURVIVAL

You spend a lot of time in Africa. What kind of impacts of climate change are we seeing there?
Huge. Life and death impacts are hitting all parts of Africa. Especially drought and massive floods. When these shocks hit places that are right at the edge of survival, as in pastoralist communities in the arid lands just south of the Sahara Desert, it kills massively. These deaths go unnoticed by the world, but they completely devastate the societies that are being hit.

[In] places like Darfur, Sudan, the Horn of Africa - those places are experiencing a significant, long-term decline in precipitation that's now stretched over the last quarter century. The effects have been devastating. They have led to war. They've contributed to the massive conflicts in Darfur. They've contributed to the instability in Somalia. They become security threats for the world, in fact.

I visited the Turkana people in northwest Kenya, who have been devastated by increasingly frequent droughts. Can you speak to that particular part of the world?
Sure. The pastoralist areas in northern Kenya or on the Somali border [are] a long drylands belt that lives just at the edge of survival. The people depend on rainfall for livestock, to replenish grasses for feeding animals. They depend on the rainfall for the meager crops that they're able to grow.

When the rains fail, [there’s] mass displacement of people. Often migration of these pastoralist communities [moves] into the sedentary farming communities, and that's where a lot of the clashes take place, in crisis zones like Darfur.

Many, many are dying, and when they die, it's either ignored by the world or attributed to something wrong with those societies. But the attribution to long-term climate change will show up in the scientific data over time.

BIGGEST BOOM IN ECONOMIC HISTORY

You've read the Stern Review [on the Economics of Climate Change, the 2006 study commissioned by the British government that marked a turning point in the climate debate. The chief of Britain's economic service, Sir Nicholas Stern] calls this the biggest market failure in history. What does that mean?
What Sir Nicholas Stern is saying in that report is that markets as they're constituted now  – the way we trade, the way we produce - these markets don't handle [the climate] problem properly for one main reason: It's free to put carbon dioxide and other greenhouse gases into the atmosphere. It's a general waste disposal site for the world; yet the social costs of those greenhouse gas emissions are tremendously high. The costs of those actions are not recognized in day-to-day business calculations.

That's an interesting analogy. That we've turned the atmosphere into a free dump.
We've always treated the atmosphere that way, and we've gotten away with it for the first hundred thousand years of our modern species. We never produced enough carbon dioxide and other greenhouse gases to make a consequential difference.

It's only when we've arrived with 6.6 billion people on the planet [and] a global economic activity of about $60 trillion, based on fossil fuels, that we make a global and highly consequential difference.

With the amount of growth that we're seeing, not just here, but certainly in India and China, Indonesia, Brazil, Mexico, places where populations are coming out of poverty, joining a middle class, we're going to have, for certain, a lot more economic activity. So how do you turn around the carbon emissions problem?
We’re in the biggest boom of economic activity in world history now. The world economies growing at about five percent per year, which means that it is doubling in magnitude every 14 years.

[T]here are massive improvements of living standards in China and India, which were impoverished societies just a generation ago. They're experiencing major improvements of well-being and naturally want more of it. And it requires energy.

Is it fair to ask them to slow down?
Of course it's not fair to ask them to slow down when we're way ahead. It's also not going to happen.

What does that mean for carbon emissions?
The overall effect could well be an economy that is six times larger than what we have right now. The implication of that is if we were to continue using the same technologies we use now, we would absolutely wreck the planet. In fact, we'd wreck it so badly that the growth itself would be turned off because we would have upheavals well before we got to that six-fold increase.

We have to change the way we live. Change the way we produce. Have a new kind of energy system. The good news is that this seems eminently feasible if we get organized to cooperate and to actually get the job done. Probably not at a very high cost, in fact.

I don't want to be overly skeptical or negative about this, but I don't see us making those changes that you're saying are necessary.
I think the world will make the changes because the costs of doing so will be discovered to be low relative to the costs of not doing so.

“A SHOCKING DISREGARD FOR SCIENCE”

Big oil companies, the two biggest, at least in the Western world, Exxon Mobil and Shell, are not getting out of the oil business. They're not doing much at all. [Out] of $40 billion in profit last year, Exxon, I think, put $100 million into research. That's really nothing.
There are all sorts of technological options that, if we get serious about it, can enable us most likely to combine the use of fossil fuels – the oil, natural gas and coal – and lower emission. But we have to get serious about it with automobiles, for example. We already have hybrids that substantially increase the miles per gallon, and now we're on the verge of having plug-in hybrids that would enable a gasoline reduction perhaps by three-fourths per mile of the vehicle. Some of the large auto companies are saying that this is feasible within the next two or three years, in fact, for them to begin rolling out models.

This will sound like a dumb question to a lot of viewers, but how do you understand the Bush administration's antagonism to climate change science?
I think there were a couple of things going on in the Bush administration. One, perhaps the most important, is they didn't want to lose West Virginia. West Virginia was the margin of victory in the year 2000, just like Florida was. If West Virginia had gone a small number of votes the other way, President Gore may have done something quite different.

So you're talking about a coal-mining state.
I suspect Karl Rove said to George Bush, "Don't touch this. We're going to try to get every coal-mining state we can."

There also is, more generally, in the administration a rampant anti-environmentalism and a shocking disregard of science. That last point really is important for us to dwell on. To understand the climate change issue requires serious attention to the underlying science.

It's complex, and it requires thousands of scientists studying all aspects of earth systems: ancient climate, modern climate, satellite readings, complex computer models of our climate system. This administration has been outright hostile to science from the beginning. It aimed to politicize it. It aimed to muzzle scientists who took positions that were found to be politically contrary to the positions of the administration. Only at the very end of the administration, did the president say, "Oh, yes. Oh, yeah. It's serious. Maybe we should do something about it."

In fact, what's really happened in the last few years is that the business community and the public got it, and the business community went to the White House and said, "You’ve got to do something. This is real. It's serious. We have technologies. We need a framework to act."

REGULATION AND INCENTIVES

Well, again, what they want is clear signals, so they can make investments. To build a power plant, it's a 40-year investment. They want to know what kind of power plant they can build, so they don't start building a bunch of plants that in two years [are rejected].
Absolutely. The business community's making business calculations. And what they're telling the White House is there are ways to address this issue. It actually is one of the great ironies of our legal and regulatory system that even if a utility owner wanted to invest more to have a low-emission power plant, they might be told, "No, you can't do that under current regulations because…"

…the Public Utility Commission wants to keep the prices the same.
Because the utility commission absolutely says, "You have to provide the lowest cost energy." And they say, "Well, it is lowest cost if you take into account the social costs of the high-emission factory." The regulatory commission says, "Yes. But we're not empowered to take into account those social costs. We're only empowered to take into account the cents per kilowatt hour that you're charging, and, therefore, no, you cannot build a more expensive but cleaner power plant."

We need a regulatory framework and incentive system. That's where public leadership is absolutely required. Business people are doing business. They're looking at the bottom line in the framework of the regulatory environment in which they operate. The regulators are looking in the framework of the legal system in which they operate. The laws need to change so that the [regulator] tells the business community, "Choose low-emission technologies because that's the least-cost approach, taking into account the social costs of climate change."

I've talked to some of these utility executives. They say that there's no technology available in the coal-fired power-plant model that would allow them to capture and sequester carbon. That's not going to come on line for another 15 years, at least. Should we believe these guys?
They don't know, and even their in-house engineers don't necessarily know. There is a lot of technology around. It's in research institutes. It's in academia. It's in individual companies. Some companies will tell you we got it now. They say they're going to market. They're looking for capital right now. They're ready to make big investments.

Some of them will sell you the Brooklyn Bridge, too.
We will not know until we start what's called the demonstration phase. There's research; there's development; there's demonstration. And there's diffusion, which means the uptake of technologies. So we've got a lot of research, and we've got some development of this carbon capture and sequestration technology. We have no demonstration of it to speak of.

Is this discouraging?
If I would recommend one thing only right now, it would be to get on line a number of these demonstration power plants as soon as possible. In China. In India. In Europe. In the United States. In Australia. Because we need to know whether this technology can work.

HOW MUCH CARBON ARE WE TALKING ABOUT?

The United Nations has a goal [t]o get to 10 billion tons of emissions by 2050. It says the United States needs to cut 6 billion tons down to, oh, around 2 billion tons. How are we going to get to a position of equity with the rest of the world, where we're really reducing our output to a fair and equitable level?
We're going to have to reach some international agreements on how to get emissions to a safe level. [I]n the end, it's the amount of carbon dioxide in the atmosphere that determines the overall climate change effect.

Now, there are lots of different suggestions of how to do this. And this is the essence of what international negotiations have to be about. One idea would be that there are basic standards that every country agrees to undertake.

Under the plans I've seen, we're still going to be allowed in the United States to emit well beyond our fair share of carbon dioxide.
There are no plans right now. There are only sketches. The plans will emerge in global negotiations. And the poor countries will say to the rich countries, “You do just about everything.” And the rich countries will say, “We're not going to do it unless you do it because you're the fast-growing parts of the world.” And in the end, we're going to have to strike an imperfect but viable agreement worldwide that is fair enough.

How much can the world afford for people to emit?
We need a target for the level of emissions that actually takes us essentially to zero net emissions over the course of the 21st century. In other words, we reach a point where we stabilize the level of carbon dioxide in the atmosphere.

As the world economy experiences a roughly six-fold increase of total economic activity, we'd arrive at a devastating level of carbon dioxide and other greenhouse gases in the atmosphere, without question, by the end of this century.

That means we have to move to a sustainable energy system where we get energy at lower emissions. Drastically lower emissions. That means moving partly from fossil fuels to solar power, nuclear power, niche activities like wind power. Maybe some biofuels, though that also has major adverse implications for land
use and perhaps for competition with food production.

CAPITALISM GOT US INTO THIS; CAPITALISM WILL GET US OUT

So the fundamental question is, Can we derive enough energy to support a growing population?
That's exactly right. And there's…

Do we know the answer to that?
There's ample energy available potentially. The amount of incoming solar radiation is 10,000 times the human use of commercial energy now.

There are vast amounts of solar energy that we could indeed tap. The energy that falls on the Sahara Desert could be, in the end, the energy that provides the electricity for all of Europe and Africa, if some key technologies pan out. We have tremendous amounts of fossil fuel still left. At least for centuries. Especially in coal and in so-called unconventional hydrocarbons like tar sands. But we need new technologies to use that kind of energy in a safe manner. [T]here’s reason for optimism. What there is no reason for is complacency.

There's also reason for pessimism though, isn't there?
The reason for pessimism would be that we failed to cooperate; that we continue on a conflicted course. Spending and wasting our time on war, rather than addressing the common challenges that we face on the planet. Continuing to ignore science because it is, as Al Gore says, an inconvenient truth. The reasons for optimism [are] that we're in the greatest age of science and technology in human history.

It's somewhat of an article of faith in technology. I mean, it's like we're going to pray to the God of technology to bail us out.
I would suggest that we don't have articles of faith in this. I would suggest we roll up our sleeves and see what we have. Try out what we can do, and invest in what we need. There's no guarantee in any of this. There is only a guarantee that if we continue what we're doing we're going to end up in a colossal global wreck.

And you think markets are the answer? I had a conversation with Fred Krupp [president of the Environmental Defense Fund] yesterday. He essentially used the religious comparison because of the fervor with which he relayed his faith that capitalism got us into this; capitalism will get us out of this.
There's no question that in the area of technology, the area of ideas and science and application of human know-how, we need a combination of markets – a combination with public policy. Public investment. Global effort. Cooperation. It's not just markets. It's not just government. It's not just civil society. It's altogether directed at common purposes with a framework in which all can be effective.