Introduction .... History ....a note on averages ....Poem ....Press Clippings
Are the lives of fifteen Bangladeshis worth the same as only one American?
What about fifteen trees or birds or beetles in China, for every one in Britain?
This was the assumption of the economists who created the global cost-benefit analysis of climate change for the Intergovernmental Panel of Climate Change (IPCC). GCI led the campaign to defend the "value of life" by rejecting this crazy analysis.
A group of economists, mainly in the US and the United Kingdom, have been pushing the idea of "economic efficiency" in the global climate negotiations. This effectively means that we should try to maximise the global dollar income, such that the costs of abating greenhouse gas emissions should equal the damage those emissions would otherwise have caused.
The IPCC was persuaded to include the results of a global cost-benefit analysis in its report. In this analysis every possible damage that might result from global warming, including human lives, must be given a dollar value. These values are calculated on the basis of asking people's "willingness to pay" to avoid the risk that damage. People in rich countries, it was assumed, would be willing to pay 15 times more than people in poor countries. In other words, your right to live depends on your income. The same ratio was applied to non-human life in each country, i.e forests, biodiversity etc..
This is not just an academic absurdity. These figures were aggregated using US$ market exchange rates, to show that the damage due to projected CO2 doubling would be less than 2% of Gross World Product, similar to the projected abatement costs, suggesting that perhaps it is not "efficient" to make much abatement. Consequently many lives, most of them in poor countries, would be lost because of the unequal valuation.
Consider this:
Most of the abatement would be borne by the industrialised nations because they have contributed most to the problem.
Most of the damage would be borne by the developing nations, because there are more people there, they are less able to adapt to climate change, and they are mostly in the warmer parts of the world.
Thus, on a US$ "efficiency" basis, this skewed distribution pushes up the abatement costs and lowers the damage costs.
GCI has argued that this is an absurd basis for any climate change protocol.
GCI's campaign to "defend the value of life" has been supported by many governments, NGOs and individuals around the world. Consequently, the chapter of the IPCC report containing this analysis was effectively ridiculed by its own summary, agreed by governments in Montreal, November 1995.
Professor David Pearce of the Centre for Social and Economic Research on the Global Environment (CSERGE), University College London, was asked to be lead author of the IPCC Working Group 3 chapter on "economic and social costs of climate change".
This basis of this chapter was a cost-benefit analysis created by Samuel Fankhauser for his PhD in CSERGE, where he was a student of David Pearce. This was not the first such cost-benefit analysis (there are several earlier ones by William Nordhaus), but was hailed as the most comprehensive to date.
It was later published in a book by Fankhauser entitled "Valuing Climate Change". In this, the result of 2% GWP is often referred to, but the fundamental assumption behind the figures which lead to it, i.e. the 15:1 differential life valuation, is hidden in the small print of one page.
Prof Pearce's chapter thus passed the IPCC's peer review process.
Meanwhile, Global Commons Institute had obtained Fankhauser's thesis and were apalled that this result was to become part of the IPCC assessment.
GCI informed some developing country governments about the unequal life valuation.
The issue came to a head at the first "Conference of the Parties" to the Framework Convention on Climate Change in Berlin, April 1995. Kamal Nath, then Indian Environment Minister, rejected the analysis as "absurd and discriminatory" and urged other governments to do likewise.
The cost benefit analysis was also referred to as the "economics of genocide" in an article by John Adams (Geography Dept, University College London) in New Scientist.
Click here for GCI's thoughts on "Spotted owls and the economics of genocide".
GCI collected signatures of support in a letter defending the value of life, from organisations and individuals all around the world.
GCI recalculated the projected damage costs of climate change, using equal life valuations. The result was several times higher, shattering the economists' myth that all recent analyses were converging on this 2% of GWPfigure.
The results of this simple recalculation can be seen here (illustrated by graphics)
GCI also stressed the importance of using Purchasing Power Parity exchange rates rather than US$ Market exchange rates. IPCC acknowledged this point, but it later transpired they had incorporated PPP exchange rates into only part of the calculation, leading to meaningless reported damage ratios.
Meanwhile the lead authors of the IPCC WG3 chapter insisted that it could not be changed at this stage. However, they realised that the controversy could hold up the whole IPCC report, and arranged an extra meeting in Montreal in October 1995.
In preparation for this, GCI produced an extensive paper published in the "Ecologist", demonstrating several ways of calculating the damage costs, and thus showing that there is such a wide range of possible results that the cost-benefit approach is effectively doomed to failiure.
"A Recalculation of the Social Costs of Climate Change".
You can also read Fankhauser and Tol's response to this paper, and GCI's reply to them.
At Montreal, govenrments agreed on a new "Summary for Policymakers" to the chapter. IPCC rules are such that governments agree the summary, wheras authors write the chapter. The new summary effectively ridiculed the chapter. The summary used to be viewable on http://www.unep.ch/ipcc/sumwg3.html but material on WG3 does not appear to be on or accessable through the new www.ipcc.ch site.
GCI considers this a victory for common sense, equity and survival for us all.
However, we continued to campaign for the chapter's complete withdrawal before the IPCC plenary meeting in Rome, December 1995.Thus culminated in a letter to the scientific journal "nature", signed by many scientists, calling for IPCC to withdraw the chapter. To view the letter in nature click here
A leading UK diplomat and climatologist Sir Crispin Tickell added weight to the campaign rejecting the differential life valuation.
Prominent articles on the subject also appeared in several major Newspapers, including the "Guardian" and the "Independent" in the UK
However, the chapter and its opposing summary was rushed through the IPCC plenary in Rome without allowing time for further objections.
The IPCC report is now printed, but GCI will continue to ensure that the world knows what the economists really mean by "efficiency" in the global commons. Meanwhile,we are developing alternative proposals for achieving a consensus. You can view these in detail in our new "proposals for a protocol" (September 1996), or the more concise "Global Commons Initiative".
Click here to see a poem telling the story of the "value of life".
You can also view some press clippings
New Scientist / Nature (nov
95) / Nature (dec 95) /
Independent / Guardian
Prof Pearce and the other economists are embarressed by their IPCC chapter's summary. Their main defence now rests on the argument that the result (% of GWP) would not be different if "average" (rather than OECD) values of human life were used throughout. However, this is an artefact of the simple caclulation of the expected mortalities, which deserves elaboration:
The losses of human lives were based only on heat stress. It was assumed that the temperature will rise by the same amount everywhere, that this would have the same affect on mortality everywhere, and that mortalities are simply proportional to population regardless of people's ability to adapt to climate change.
This is ridiculous, for several reasons.
(A) Rich countries are generally colder, where a temperature rise might even be welcome, wheras poor countries are generally warm enough already.
(B) Global warming is now projected to be much greater in non-industrial regions of the world, than in regions where sulphate aerosols from pollution cool the surface by reflecting sunlight.
(C) Poor countries are in regions of the world more susceptible to freak weather events which would cause additional mortality.
(D) Both healthcare and agriculture are less adapted to respond to climate change in poor countries
And therefore, deaths per capita due to climate change would be greater in the devloping countries. If these factors were properly taken into account, the use of an "average" value of life would lead to a much higher total damage than derived from differential value of life based on "willingness to pay".
