Different age groups think differently about energy use, says S.Ananthanarayanan.
Steps to contain global warming and moving to greener lifestyles are not without their costs. And the pay-back is a more habitable world. However, does the cost-benefit ratio differ according to age-bracket of individuals?
Haozhe Yang and Sangwon Suh, from the Bren School of Environmental Science and Management, University of California, Santa Barbara, look into the question in a paper in the journal, Nature Communications. The costs and benefits of climate change mitigation, of course, are not the same for all countries. But are they higher for younger people than for older ones? And does the ratio differ in different parts of the world?
And two weeks later, an editorial in the journal, Nature reports that “young people will be key” at the 26th Conference of Parties (COP26) to the UN climate convention, which started in Glasgow, Scotland on 31st October.” The world’s youth movements are following the science of climate change… and COP26 would be wise to involve them in decisions”, the editorial says.
The Nature Communications paper seeks to substantiate the belief that younger people have a larger stake. “A prevailing narrative,” the paper says, “is that younger and future generations are the greatest victims of climate change driven by the actions and inactions of older generations.” While younger people should then benefit most by mitigating climate change, there is “no peer-reviewed literature that quantifies the costs and benefits of climate change mitigation by age cohorts at a country level,” the paper says.
Containment of global warming calls for several measures. One is less use of fossil fuels and energy, and others are changes in land use, agriculture, housing and services. These changes in economic systems would affect all sectors and lead to reduction of the GDP of nations. In deriving the overall cost of measures to mitigate global warming, as called for by the Paris Agreement, the paper relies on Integrated Assessment Models, developed by research groups, and adopted by the 2014 report of the UN’s Intergovernmental Panel on Climate Change (IPCC). And the cost, the paper says, works out to between 2% and 6% of the global GDP, on till the year 2100.
The benefit of incurring this cost would be avoiding the economic damage of temperature rise. The paper cites a 2015 study which said productivity of states peaks at an average annual temperature of 15°C, and then there is a pattern of fall in productivity as temperature rises. And on this basis, the study estimated that “keeping the global temperature at the 2010 level could save 23% of global GDP by the year 2100.”
What the estimates indicate is that while there would be losses due to the costs of keeping global warming down, and these would dominate the early years, the saving, of the greater economic loss that higher temperature would cause in later years, if warming were not contained, would result in a net gain. Figure 1 shows the way the figures change, with benefits rising, as the years advance, to compensate costs.
What the study has not considered, the Nature Communications paper says, is how these costs and benefits accrue to different age groups in different parts of the world. We can see that older people, at the start of the 2020 to 2100 period, would bear higher costs but reap lower benefits, within their lifetime. In contrast, younger people would benefit from lower temperatures in later years, as compared to the ‘no mitigation and no loss in earlier years’ scenario. There is hence a conflict of interests between the older and younger lot, when valuing current investments to contain global warming.
In order to quantify the relative interest of persons of different age groups, the authors calculated the cumulative cost-to-benefit difference, per capita, with the numbers pertaining to later years discounted to the base year at the rate of 3% per annum. The cost-benefit of each year over the lifetime of a person was hence reduced to its value at the base year and the lifetime cost or benefit was the total of each year’s discounted figure. And this was done for different age-groups, of persons born between 1920 and 2020, and separately for 169 countries.
Some of the findings, are shown in Fig 2, that the year 1960 is the cut-off in high income countries – those born before would face a net loss as a result of climate change mitigation, while those born after 1960 would be gainers – and the year is later, till 1980 in lower income countries. The cut-off year itself is variable, according to the form of the model, and circumstances, like in countries in the north, warming would lead to savings in heating costs. But the message is that younger groups are the ones that would most benefit, in terms of less hardship, as a result of climate change mitigation. “Age cohorts born prior to 1960 generally experience a net reduction in lifetime gross domestic product per capita. Age cohorts born after 1990 will gain net benefits from climate change mitigation in most lower income countries. However, no age cohorts enjoy net benefits regardless of the birth year in many higher income countries,” the paper says.
The editorial in Nature is about the Glasgow meeting, 1st to 12th Nov 2021, where countries would report their compliance with commitments made in 2015. While there has been progress in some sectors, like fossil fuel replacement, it is clear that we need policies with a wider reach - “a revolution in how economies are run, and in the choices world leaders must make,” the editorial says.
In the 2015 meet, countries agreed to review their targets to match latest assessments, every five years. “Forty-eight countries — including major emitters — are yet to set new targets, and some clearly have no plans to accelerate their climate ambitions,” the editorial says. Again, in Copenhagen in 2009, the richer countries agreed to provide US$100 billion per year to less wealthy nations by 2020, a promise that is far from being kept.
At Glasgow, the new generation of climate researchers and campaigners are expected to “call out climate laggards, and countries that are not fulfilling their funding pledges”. For the first time, the editorial says, the “future generation” is more than words in policy statements – the generation is here and insists on being heard. In the context, the study by Haozhe Yang and Sangwon Suh underlines the clash of economic interests that is involved and suggests a way forward.
“Closing the economic disparity among age cohorts may require different climate policies to different age cohorts. The increase in renewable asset price may alleviate the intergenerational disparity under climate change mitigation, given that different age cohorts hold varying amounts of renewable assets. Our study shows that the cost benefit distribution among age cohorts can be an important consideration for policy makers when designing tax and fiscal policies in response to climate change mitigation,” the study says.
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