The Climate Change Challenge

Two Arguments for Acting Now

Kemal Derviş

The debate on climate change has evolved in recent years from being about whether climate change is a serious problem, towards being about when and how to address it. Tackling climate change is an imperative that we have to address now for two main reasons, namely insurance against possible catastrophic outcomes, and distributional concerns. Let me elaborate these two reasons in the following sections.

Insurance against Catastrophic Outcomes

Increasingly, the decision to address climate change is being viewed as one of preventing catastrophic risk, rather than a normal investment decision that relies on standard public expenditure analysis aiming to smooth consumption optimally over time. Even though we do not know with certainty what will happen and when, we do know that catastrophic outcomes are possible.

Some of the catastrophic effects of climate change include, for example, the melting of the Greenland and West Antarctic ice sheets, which would result in very large sea level rises changing the world’s physical and human geography. Changes in the thermohaline circulations (the 'conveyer belt' of ocean heat that determines much of the earth’s climate) affecting the Gulf Stream would lead to dramatic changes in global weather patterns. Climate tipping points could be reached, unleashing self-reinforcing multiplier feedback effects—e.g., saturated carbon sinks and the release of methane from arctic permafrost thawing—that can dramatically amplify temperature increases.

Therefore, while there is uncertainty as to the magnitude and timing of the damage, we know that it might be very large and that it is a real possibility, so we must take some form of insurance against that risk by starting to mitigate it. But when should we start, given that these outcomes are not likely to occur in the short run?

What is done today in terms of emissions cannot be easily undone. The heat trapping gases that we emit into the atmosphere remain there for a long time, at least a century, if not longer. If we make a mistake today in underestimating the effects of emissions, it is not the kind of mistake that we can correct easily next year: we cannot speedily take back those gases. So the most prudent forms of insurance need to be taken sooner rather than later. The more we wait, the greater the risks of catastrophic outcomes. We must step up our efforts to mitigate climate change now as a form of insurance against these growing risks.

Distribution Concerns

In the analysis of catastrophic outcomes, taking insurance is justified on behalf of the whole of humanity. But we have to analyse climate change in a multi-country world because we know that the impact of climate change will be very different depending on where one lives.

For example, while in some areas of the world agriculture may actually improve, at least in the short run, this will not be the case in some of the poorest countries. It has been projected that without mitigation efforts and assuming 'business as usual', developing countries will suffer an average 10–25 per cent decline in agricultural productivity by the 2080s (ignoring carbon fertilization). Declines will be much steeper in some countries. For example, India may face a decline of 30–40 per cent of agriculture productivity, Sudan a 56 per cent drop, and Senegal a 52 per cent fall.

The poor will also suffer from heightened water stress and scarcity. Changed run-off patterns and continued glacial melting will have significant impact on water availability, interacting with already severe ecological pressures on water systems. Central Asia, Northern China, and the northern part of South Asia face serious vulnerabilities associated with the retreat of glaciers. Many of Asia's great river systems are likely to experience an increase in flows over the short term, followed by a decline as glaciers melt. These river systems provide water and sustain food supplies for over two billion people.

Climate change will also increase the exposure of the poor to extreme weather risks. Climate change science points to intensified tropical storms, more frequent and widespread floods, and drought.

Loss of environmental resources like wetlands also contributes to reduced resilience in the face of climate change. The world’s wetlands provide a range of ecological services, harbour biodiversity, sustain fish stocks, and provide agricultural, timber, and medicinal products. They also buffer coastal and riverside areas from storms and floods, protecting human settlements from sea surges.

There is also the likely impact of climate change on health. This could happen through increases in malnutrition and consequent disorders; increased injury, disease, and death due to extreme weather; the mixed effects on the range and transmission potential of malaria in Africa. The negative health impacts of climate change are expected to be greatest in low income countries.

So we now know with certainty that climate change will have a larger and more immediate negative impact on many of the world’s poor. Our concern for development and poverty reduction, as captured in the Millennium Development Goals, dictates that we mitigate climate change urgently to reduce the threats to the development prospects of the most vulnerable, as well as take action to help those already affected to adapt.


To conclude, there are two key dimensions to the climate change challenge. Possible catastrophic outcomes for humanity as a whole—no matter where one lives—represent a long term challenge and there is a strong case to start taking insurance by initiating mitigation now. Advancing development and reducing poverty would become much more difficult, and could even face reversals, if we do not act against climate change urgently, both in terms of mitigation and adaptation.

WIDER Angle newsletter, February 2009

ISSN 1238-9544