"The Climate Economy"-Definition & Explanation
Thursday, October 29, 2009SUSIE GHARIB: In Washington today, Senate hearings on a bill to cut carbon dioxide emissions wrapped up with no action. The committee tackling the issue is squabbling over whether the complex legislation should be scrutinized by the Environmental Protection Agency. At issue: the economic impact of cutting greenhouse gases by 20 percent. And that's just one issue at the heart of climate change. It's a complex topic that has far-reaching implications for us and the world. So tonight we start a series we're calling "The Climate Economy," taking an in-depth look at the subject. Washington bureau chief Darren Gersh has some basics on just what the climate economy is.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is not your usual economic story. We're not talking about disposable income or durable goods. We are talking about the earth's climate. And we are talking about how to control the substance that fuels our economy, carbon. This story is big.
EILEEN CLAUSSEN, PRES., PEW CENTER/GLOBAL CLIMATE CHANGE: It's really a revolution is the way I would put it.
GERSH: Eileen Claussen heads up the Pew Center on Global Climate Change. She says controlling carbon will affect the entire global economy.
CLAUSSEN: It's going to change the kind of vehicles you drive, the transportation system that you use, how much energy goes into the products that you buy. So I think it touches everything.
GERSH: A brief science lesson might help here. Carbon dioxide is created when a source of carbon, often coal or oil, is burned to create energy. Add up all the sources of carbon burned on the planet and figure in the other gases contributing to climate change and you get the equivalent of close to 50 billion tons of carbon dioxide a year. Energy Information Administration Director Richard Newell says we know what all that gas does in the atmosphere.
RICHARD NEWELL, ADMINISTRATOR, ENERGY INFORMATION ADMIN.: Just like a greenhouse has glass and then keeps the heat into a greenhouse, these gases surround the atmosphere and keep radiation and heat on the planet.
GERSH: So much heat that most scientists say the earth is now one degree warmer on average than it was 150 years ago. What's uncertain is exactly what happens next. Depending on population growth and energy use, if nothing is done, it's estimated the earth will warm between 4 and 8 degrees over the next century and more after that. To put that in perspective, I spoke with Brian Murray who studies the economics of climate change at Duke University.
BRIAN MURRAY, DIR., NICHOLAS INST. FOR ENVIRONMENTAL STUDIES: We're talking about this happening in a very short period of time. We're talking about a possible change in our environment unlike anything we've ever seen in history.
GERSH: A small, but vocal minority argues global warming is not a big risk. At the Competitive Enterprise Institute, Fred Smith argues the dire predictions overstate the earth's sensitivity to carbon dioxide.
FRED SMITH, PRES., COMPETITIVE ENTERPRISE INSTITUTE: Compared to all the other problems we face and our abilities to massively reduce our reliance on energy, which is what's required if these peoples' program's are followed, are the costs of that proportional to the potential benefits of that? And I would argue not.
GERSH: For most scientists, the debate is about probabilities. Given all the complexities of the earth's climate, there is a small chance it may warm less than that 4 to 8 degrees we talked about earlier. But there is an equal chance it may warm much more with dire results for coastal cities and agriculture. In that sense most economists believe action to confront climate change is very similar to an insurance policy for homeowners.
MURRAY: We think we know that there is some small chance of a major catastrophe and if you just took the statistical averages you might say well, let's not worry about that, but that's not how insurance works. That's not how risk works. Those catastrophic risks are things that make you take action now.
GERSH: And that is just what Washington is debating today. Why, what and how to take action. We'll look at what the climate economy will mean for you, the business where you work and the planet where you live as our series continues. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
