Global Challenges

An Overview of Global Challenges:

A look at Climate Change & Peak Oil
and the Potential Implications
for the Global Economy & Social Justice

Celine McElvery

May 11, 2007

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 Global Challenges

Introduction ................................................................................................................................... 3

Climate Change........................................................................................................................... 3

Peak Oil .......................................................................................................................................... 9

Potential Implications for the Global Economy and Social Justice .................................... 13

Appendix ..................................................................................................................................... 17

References .................................................................................................................................. 19

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Introduction
The daily news warns us that humanity is facing unprecedented challenges in
the form of climate change and the diminishing world reserves of fossil fuels. These
potential crises threaten our economic and social well being with no imminent solutions
currently being enacted in the United States to mitigate the risks. Should these
predictions come to pass, humanity will be tested as it never has been throughout
history, for the threats to our society are truly global in proportion and nature. As with
any hot-button topic, the media has painted many different pictures, ranging in
extremes from calling both issues a complete hoax to foretelling the end of humanity.
This paper reviews the basic sciences and processes behind climate change and peak
oil, and attempts to separate fact from fiction. It also includes a consideration of the
projected consequences, with attention to the interdependent nature of the issues.

Climate Change
Climate change, defined by the UN commissioned Intergovernmental Panel on
Climate Change (IPCC) as “any change in climate over time, whether due to natural
variability or as a result of human activity,” is fast becoming a central issue as scientists
posit the role of anthropogenic (resulting from human activity) greenhouse gases in this
equation (Working group [WG] 1 [a], 2007, p.2). Scientific observations are detailing a
warming planet, with an accelerated trend in recent years. So why is this happening?
An examination of the basic science behind the theory commonly referred to as
“global warming,” begins with a look at the role of greenhouse gases in the Earth’s
atmosphere and their subsequent effect on temperature.

Global temperature variability is normal – historical trends have shown both

warm and cold periods lasting for centuries. Recently, in geological terms, we have
emerged from what is commonly referred to as the “Little Ice age,” lasting from about
the 17th century to the middle of the 19th century. Likewise, a period known as the
“Medieval Warm Period” was a relatively warm era between the 11th and 15th centuries.
(Pew Center on Global Climate Change, n.d.) These shifts in the earth’s climate are the
result of natural variations, ranging from solar cycles and orbital positioning, to volcanic
eruptions, the oceanic thermohaline circulation and greenhouse gases to name a few.
(Union of Concerned Scientists, 2005) These atmospheric gases, primarily carbon
dioxide (CO2), methane, nitrous oxide, fluorinated gases, and water vapor, exert a
warming influence on the Earth, as sunlight passes through the atmosphere unabsorbed
to be emitted back in the form of radiated heat from the land and oceans. Some of
this heat is absorbed by these gases, creating an insulating effect, while some heat is
re-emitted towards the surface, and some escapes into space. This natural warming
process provides the habitable environment that has allowed life to develop and thrive
on this planet. This vital “greenhouse effect” warms the earth’s surface by roughly 60

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degrees Fahrenheit on average – without it, the average surface temperature would
be below freezing (32oF). (Pew Center on Global Climate Change, n.d.)

However, since the dawn of the Industrial Revolution with its accompanying
boom in energy use, human activity has increased the amount of carbon-dioxide and
other greenhouse gases released into the atmosphere through the burning of fossil fuels
such as coal, gas, and oil. Other anthropogenic sources include industrial processes,
deforestation, and agriculture. Since the onset of the Industrial Age, global
atmospheric CO2 levels have increased by over 35% from their natural state - as
measured in 2005. (U.S. Environmental Protection Agency, 2006). Subsequently, our
planet is warming as we add insulating gases to our atmosphere. This then begs the
question: How is science able to measure temperature and gas levels beyond the
scope of its records and instruments throughout earth’s history?

Paleoclimatic data is essential to understanding climate variability over the past

600,000+ years. Various scientific methods, including the study of ice cores, sediments,
tree rings, and other sources, yield invaluable information from these natural archives of
past climates. Through the combining and corroborating of data from these different
paleoclimatic sources, scientists have been able to recreate near global records
detailing, most notably, temperature, precipitation, CO2 and other greenhouse gas
levels throughout the glacial and interglacial periods of the earth (National Oceanic
and Atmospheric Administration [NOAA] , 2007). As can be seen in Figure 1, a
remarkably strong correlation between temperature and CO2 concentration has
emerged from these records – when CO2 levels rise, so does temperature and vice
versa (NOAA [a], 2006). Some have argued that this correlation does not suggest
causation, and that the records actually show a lag of CO2 behind temperature each
time the earth begins to warm out of the glacial periods. This is correct, as it is believed
to be orbital forcings (the earth’s position and orientation relative to the sun) and solar
radiation that initiate the comings and goings of ice ages (NOAA, n.d.[a]). However,
studies have indicated that CO2 atmospheric concentration tends to lag the onset of
warming only by about 800 of the estimated 5000 years over which the warming cycle
is completed. It is thought that this timeframe is consistent with the time needed for
CO2 to be ungassed from the warming oceans, a large natural reservoir that absorbs
some of the atmospheric CO2. It is further believed that for the remaining 4200 years of
the deglaciation, a CO2 atmospheric feedback cycle is the amplifying mechanism
driving the warming climate (Caillon et al., 2003). Additionally, data from such studies
indicate that throughout the past 420,000 years, extending back through four ice ages,
CO2 concentration at its maximum never surpassed 300 ppm (parts per million).
Currently, human influence has exceeded nature’s threshold by approximately 84 ppm
(Tans, 2007). This is significant as CO2 has never increased more than 30 ppm in less
than a thousand years, yet now that same rate of increase has been seen in under 17
years. (IPCC WG1 [b], 2007)

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Figure 1

Mann et al.’s 1999 study of ice cores and tree rings (as cited on the National
Climate Data website) generated a thousand-year Northern Hemisphere temperature
reconstruction suggesting that the late 20th century, and the year 1998, in particular,
were significantly warmer than any average temperature value in the previous
millennium, by over two standard deviations (NOAA, 2006 [b]). (See Figure 2.) While this
study has drawn some criticism regarding part of its methodology, subsequent peer-
reviewed studies have supported the basic findings and conclusions that the
anomalous late 20th century warmth has been unprecedented over at least the past
millennium, and that natural forces alone cannot account for it. Wahl & Ammann
(2006) state in their abstract, “Our examination does suggest that a slight modification
to the original Mann et al. reconstruction is justifiable for the first half of the 15th century

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(~ +0.05°), which leaves entirely unaltered the primary conclusion of Mann et al. (as well
as many other reconstructions)…”

Figure 2: 1000 Year Paleoclimatic Temperature Reconstruction (Mann et al.)

Additional striking evidence emerging from the study of polar ice cores has
challenged science’s basic understanding of how climate systems work. Changes in
temperature and precipitation previously believed to have taken thousands of years to
evolve are now known to have changed at times in under twenty years (National Ice
Core Laboratory, 2005). Indeed, the National Climate Data Center website references
abrupt climate changes “that may have been as large as 10°C, and may have
occurred over a decade” (NOAA, n.d., [b] par. 2). They go on to question the effect
this would have on modern society and underscore the “pressing need to develop an
improved understanding and ability to predict abrupt climate change events” (Ibid,
par. 3). Such evidence has left scientists grappling to find new mechanisms capable of
driving such abrupt changes, in addition to seriously questioning how anthropogenic
gases might affect climate change.

This rapid rise in CO2 concentration and corresponding rise in global temperature
in the late 20th century cannot be explained by natural forces alone. There is no doubt
among the overwhelming majority of climate scientists that this spike in greenhouse
gases is the result of human activity. Empirical data is now amassing in support of the

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theory of anthropogenic fossil fuel emissions as the driving force behind current climate
change. The IPCC, established by the United Nations Environmental Programme and
the World Meteorological Organization in 1988, has recently released its Fourth
Assessment Report, updating its previous 2001 report with important new data obtained
in the past six years. This new report (AR4) states; “The understanding of anthropogenic
warming and cooling influences on climate has improved since the Third Assessment
Report, leading to a very high confidence [>90%] that the global average net effect of
human activities since 1750 has been one of warming… and very likely [>90%] due to
the observed increase in anthropogenic greenhouse gas concentrations” (WG1, 2007,
p. 3 & 10).

Yet the problem is more about changing climates and ecosystems and the
accompanying consequences, than changing temperatures. A brief consideration of
projected consequences details a challenging new reality, underscoring the imperative
for mitigation. Indeed, already in 2005 a joint science academies’ statement was
issued from the US National Academy of Sciences along with ten other science
academies from around the globe, urging all nations and especially the G8 to take
prompt action to reduce the causes of climate change. The IPCC’s new AR4 report
points out that even curtailing current greenhouse gas emissions to the year 2000 levels,
will still require adaptive measures due to the warming influence of past emissions, and
the timescales (multi-decadal if not more) required for removal of CO2 from the
atmosphere (WG2, 2007). The report further states that, “adaptation alone is not
expected to cope with all the projected effects of climate change, and especially not
over the long run as most impacts increase in magnitude” (Ibid, p.18).

It is precisely the very nature of the delayed effects of anthropogenic gases that
creates the urgency for mitigation. Currently, people’s perception of the pending
problem is just that – pending. What is not readily obvious to the uninformed is the time
lag at play between creating offending emissions and feeling their impacts. If
governments wait until their populations are sufficiently inconvenienced by the
projected consequences of climate change, it may well be too late to make a
measurable difference, if any at all.

And therein lies the rub – compounding the risk is the reality of positive feedback
loops and their associated “tipping points.” A positive feedback loop “occurs when a
change in one component of the climate occurs, leading to other changes that
eventually ‘feeds back’ on the original change to amplify it” (Schmidt, 2006, par.3). The
effect on a system becomes self-perpetuating, often triggering other effects in a
cascading and self-reinforcing manner. A tipping point is the point at which a positive
feedback loop begins. Among the better known climate positive feedbacks is the ice-
albedo one, where warming temperatures increase melting, which in turn decreases
the reflectivity of the surface (due to the loss of the ice), increasing solar absorption,
and thereby increasing melting. It is important to note that there is not one magical

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tipping point, but many, and that some may not be evident until we’ve triggered them.
Yet change can be effected, and some feedback cycles can be mitigated, albeit with
different time horizons. The “point of no return” scenarios are associated with the
melting of the ice sheets, both glacial and polar – these, if lost, would be impossible to
regain in a warming climate, and those consequences would be drastic (Schmidt,
2006).

Among the projected impacts of climate change are rising sea levels as
increasing temperatures melt glaciers, and warming oceans undergo thermal
expansion. The Chicago Tribune’s Laurie Goering recently wrote an article detailing the
plight of impoverished Bangladeshi farmers losing their farmland and homes to swollen
rivers from Himalayan glacial melt. Bangladesh, with many low-lying islands, is already
feeling the impact of rising seas as saltwater creeps into its coastal soils and drinking
water. “Farmers near the Bay of Bengal who once grew rice, are now raising shrimp,”
the article states (Goerig, 2007, par. 5). While this may appear as an improvement to
some, the cost of adaptation can be very high, in addition to the fact that rice is an
irreplaceable staple of the Bangladeshi diet. The article quotes Bangladesh’s
representative to the World Conservation Union as saying, “Bangladesh is nature’s
laboratory on disaster management” (Ibid, par.8).

Flooding is a clear challenge posed by climate change, yet not simply from rising
sea levels. Heavy and more frequent precipitation is very likely to occur, leading to a
number of issues as soils erode, crops are damaged, water quality is affected, people
are displaced, etc. While the threat of floods might lead one to suppose an
overabundance of water, the heavy precipitation events that lead to flash flooding are
accompanied by a lack of absorption of water by the soil, creating run-off and
counter-intuitively, drought. In turn, drought may lead to land degradation, lower crop
yields, water shortages, and food scarcity issues to name a few (IPCC WG2, 2007).

The significance of the water depletion issue should not be underestimated.

Millions of people depend on water supplies for drinking and irrigation that are
replenished by melting snow packs during the warmer, drier season. Rising
temperatures are already producing declines in these snow packs; this is evidenced in
the US by the estimated 15-30% drop in snow water from the Cascade Mountains in the
Northwest (Hartman, 2007). While many countries around the globe, the US included,
over-pump non-replenishing aquifers, the risk to our replenishable aquifers is dire as
water tables drop (Brown, 2006). Another variation of the water shortage issue is being
seen in Uganda, whose economy depends on hydropower, yet their reservoirs stand
depleted and thus unable to generate the energy needed (Mubiru, 2006). Ugandan
President Museveni has gone so far as to call climate change “an act of aggression
against the poor” (Associated Press, 2007, par. 18).

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The IPCC report also cautions us about increasing health risks associated with
climate change. Among these is an elevated risk of heat-related mortality. In 2003
much of Europe was engulfed in a record breaking, fatal heat wave that claimed the
lives of 49,000 people – Italy alone lost more than 18,000 souls (Brown, 2006). Additional
health concerns include increased malnutrition, water and food borne disease, as well
as elevated risks for contracting infectious diseases. Indeed, part of this risk may well
emerge from the loss of biodiversity, another casualty of climate change, and the
subsequent loss of new cures yet to be discovered. The most recent issue of Mother
Jones (May/June 2007) states that, “seven in ten biologists believe that mass extinction
poses a colossal threat to human existence, a more serious problem than even its
contributor, global warming” (p.45). The World Conservation Union, while stating that
no one knows what the current extinction rate is, does list recent calculations by
leading scientists as placing that figure at an estimated 1,000 to 10,000 times the normal
background rate (Stuart, n.d.).

Yet, as climate change is driven by fossil fuel emissions, global warming is not an
environmental problem in the traditional sense, but rather it is first an energy problem.
Energy drives our economy. Our modern agricultural system is energy intensive. We live
in age dominated by oil. But oil is a finite resource, and once burned it is gone forever –
nothing man can do will rebuild the earth’s reserve of fossil fuels. Once depleted, what
has taken nature hundreds of millions of years to create, man will have largely
consumed in a few centuries. Thus the problem is two-fold, but with a common answer:
climate change demands that we transition to carbon-neutral, sustainable resources,
and the decline of global oil reserves requires us to find alternative energies. Indeed, it
may come to pass that the problems associated with peak oil could prove to be more
immediate than those associated with climate change.

Peak Oil
Peak oil, defined as the point at which world oil production reaches a maximum,
and falls into a terminal decline, does not mean the end of oil, but rather the end of
cheap oil. It marks the point from which oil supply simply cannot be increased in an
attempt to meet high demand. Compounding the problem is the fact that much of
the remaining oil will be more difficult to access, and therefore more expensive to
extract, and may be of lesser quality (Heinberg, 2004). A 2005 US Army Corps of
Engineers report detailing energy challenges states that, “In conventional oil fields,
usually less than half of the oil in place is recovered….eventually diminished returns is
reached and the field is abandoned with considerable oil left in the ground” (p.8).
Zittel and Schindler’s 2004 paper identifies some key trends in the history of oil
production:

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• The world’s largest oil fields were all discovered more than 50 years ago.

• Since the 1960’s, annual oil discovery has decreased tendentiously.

• Since 1980, annual consumption has exceeded annual new discoveries.

(See Figure 3.)

• Till this day more than 42,000 oil fields have been found, but the 400
largest oil fields contain more than 75% of all oil ever discovered.

• The historical maximum of oil discoveries has to be followed after some

time by a maximum of oil production (the peak). (p. 2)

Figure 3: Net Difference Between Annual World Oil Reserves Additions and Annual Consumption
(Hirsch)

In its 2006 International Energy Outlook, the US Department of Energy cites a

projected increase in world consumption by the year 2030, of 38 million barrels of oil per
day (mbd) – current world usage stands at roughly 84 mbd, while US daily consumption
alone is nearly 21 mbd (Energy Information Administration, 2007). Yet many oil experts
are skeptical that world oil reserves can meet these projected figures. In Lester Brown’s
2006 book Plan B 2.0, he notes that “of the 23 leading oil [producing countries], output
appears to have peaked in 15 and to still be rising in 8,” (p.22). Yet since the
publication of Brown’s book, one of those eight, Mexico, has announced that its giant
Cantarell field – the 2nd largest oil field in the world – has peaked, and appears to be
declining by over 13% annually with larger annual percentage declines forecast
(Malkin, 2007). Additionally, there is much doubt concerning the published proven oil
reserves for Saudi Arabia, and many experts suspect that this, the largest oil producer in
the world, may also be past peak. The inherent problem in forecasting a Saudi, or even
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Middle East peak, is the fact that the Organization of Petroleum Exporting Countries
(OPEC) will not allow any independent audits to verify their “proven” oil reserves.
Indeed when OPEC tied its production quotas in the mid-1980’s to proven oil reserves,
as a group their reported reserves jumped by almost 300 million barrels with no
significant new discoveries for the following 15 years, all while they pumped roughly 130
billion barrels of these same reserves (Simmons, 2007).

Dr. Bakhtiari, a former senior energy analyst for the National Iranian Oil Co. (now
retired), published in February 2006 an article entitled “On Middle Eastern Oil Reserves”
pointing out some important data. In it he notes that regardless of whether you
consider figures published by the Oil & Gas Journal, the BP Statistical Review, or
geologist Colin Campbell, all agree that the five major Middle East oil producers (Iran,
Iraq, Kuwait, Saudi Arabia, and the UAE) retain the majority of global oil reserves,
between 50% and 60%. Where these sources differ is in regards to the actual estimated
size of Middle East (and thus global) oil reserves. Here Dr. Bakhtiari issues a caveat: “It
goes without saying that when assaying Middle Eastern oil reserves, one should tread
carefully….seen from the point of view of most Middle Eastern countries, oil reserves are
more political than geological” (2006, par. 3). In support of this point, Bakhtiari has
cited that Iranian official proven oil reserves are quoted at 132 bnb, but claim this figure
to be overinflated by a full 100 billion barrels (King, 2006). Bakhtiari further notes that
the published reserve figures for both Oil & Gas Journal and the BP Statistical Review
rely on published official OPEC numbers, whereas Campbell’s estimations rely on
geologic evidence. While the two aforementioned publications quote the big five ME
reserves at an averaged 709 billion barrels (bnb), Campbell estimates that same
reserve at 387 bnb, and Bakhtiari is less optimistic still with an estimated range of 320-390
bnb (Bakhtiari, 2006).

Leading independent oil experts agree that world oil production is nearing its
peak, if it hasn’t already surpassed it. Already in September 2005, the previously
mentioned Army Corps of Engineers report stated that, “World oil production is at or
near its peak and current world demand exceeds the supply….unless we dramatically
change our consumption practices, the earth’s finite resources of petroleum and
natural gas will become depleted in this century” (p.7). This same report further cites
that, “the CEO’s of Agip, Eni SpA (Italian oil companies), and Arco have also published
estimates of a peak in 2005” (p.8). The Financial Times in January 2006 published an
article by Jeroen van der Veer, the CEO of Royal Dutch Shell, in which he states that his
“view is that ‘easy’ oil has probably passed its peak” (van der Veer, 2006, par. 3). Also,
Exxon Mobil, the world’s largest oil company and a prominent denier of an imminent
peaking of oil supplies, does not argue the concept of peak oil, they merely argue the
timeframe within which it will occur, publicly stating that world oil production is unlikely
to peak in the next 25 years (King B. , 2007). They cite this as a reason not to change
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our oil consumption patterns. However, they are far from being a disinterested party –
continuing high consumption rates will clearly serve to maintain Exxon Mobil’s world-
leading profit levels.

Yet a 2005 risk assessment study commissioned by the US Department of Energy

concerning peak oil highlights the dangers of delayed mitigation. Commonly referred
to as the “Hirsch Report” (Robert Hirsch was its principal author), it makes unsettling
statements regarding the unprecedented threats posed by peak oil. In brief, the report
delineates the need for immediate initiation of “crash program mitigation,” stating that
“waiting until world conventional oil production peaks before [beginning such a
program] leaves the world with a significant liquid fuel deficit for two decades or
longer….Initiating a crash program 10 years before world oil peaking helps but….still
results in a worldwide liquid fuels shortfall” (Hirsch, 2005, p.65). Most optimistically, it
states that “initiating crash program mitigation 20 years before peaking offers the
possibility of avoiding a world liquid fuels shortfall” (Ibid). It further concludes that
“government intervention will be essential, because the economic and social impacts
of oil peaking will otherwise be chaotic,” while asserting that “without timely mitigation,
world supply/demand balance will be achieved through massive demand destruction
(shortages), accompanied by huge oil price increases, both of which would create a
long period of significant economic hardship worldwide” (Ibid, p. 66). Additionally, the
report suggests that peak oil discussions “should focus primarily on prudent risk
management” rather than on forecasting timing (Ibid).

The timeframes listed in the Hirsch report are supported by numerous sources –
among them are prominent individuals in the oil field ranging from geologists, former oil
company executives, investment bankers, educators, consulting firms, financial brokers,
and oil companies. As might be expected, the individuals listed strongly lean towards a
peak prior to or around 2010, while the corporations named favor a post 2020 peak, if
any at all. The DOE forecast is listed at 2016. Since the publication of this report, Hirsch
has published an update of peak projection (April 2007) in World Oil Magazine. This
update details the belief by many of those individuals originally named in the Hirsch
report, that world oil production has either already peaked or is now peaking. Other
previously listed projections remain the same (Hirsch , 2007). The inherent difficulty in
confirming a peak is that it is only readily visible in retrospect. The nature of maximized
oil production sometimes may be characterized by a few year-long plateaus or gently
sloping declines, as opposed to the sharp production drop-offs sometimes witnessed for
individual oil fields.

Yet as Hirsch correctly points out, spending time discussing the merits of a few
years here or there really misses the point that immediate action is what is necessary
due to the delays and costs in transitioning from a fossil-fuel-based economy to a
sustainable one. The fact is that oil is running out and potentially faster than we can
accommodate without severe disruptions to our lifestyle and economy. As the recent
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(Feb 2007) Congressional General Accountability Office study just concluded, peak oil
production “presents problems of global proportion whose consequences will depend
critically on our preparedness” (p.38). An early peak with sharp declines would prove
most dire as alternative energy sources in large abundance are not yet available.
“While these consequences would be felt globally, the United States, as the largest
consumer of oil and one of the nations most heavily dependent on oil for
transportation, may be especially vulnerable among the industrialized nations of the
world” (Ibid, p.11).

Potential Implications for the Global Economy and Social

Justice
Clearly “business as usual” is not a viable option – it cannot be sustained for more
than a few years at most, whether considering the consequences of climate change or
peak oil. The need to transition from our fossil-fuel-based global economy to a
sustainable one based on renewable resources is imperative. A 2002 study published
by the US National Academy of Sciences (as cited in Brown, 2006) concluded that
humanity’s collective demands on the earth surpassed its regenerative capacity circa
1980, and by 1999 humanity had exceeded this capacity by a full 20%. Indeed, in this
energy-driven economy, food prices are beginning to be set by fuel prices, as
commodity traders compete for the same resources, given that almost all foods can be
converted to fuel. Mexico is already experiencing this issue as higher corn prices, driven
up by the demand for corn-based ethanol, have caused the price of tortillas to
escalate, doubling and even quadrupling in price in some areas. In protest,
impoverished angry Mexicans have taken to the streets, leading the Mexican
government to respond by imposing price controls (Roig-Franzia, 2007). As Lester Brown
states, “higher oil prices are thus setting up competition between affluent motorists and
low-income food consumers for food resources, presenting the world with a complex
new ethical issue” (2006, p. 39). As demand for biofuels increase, land and water
resources will decrease, thus setting the stage, as Brown notes, for a “geopolitics of
scarcity” while people and nations compete for food, fuel, and water. Couple this with
climate change projections affecting (among other things) crop yields and water
depletion, and the growing imperative becomes clearer.

The US government is not unaware of these pending global issues and the
potential security risks they pose. Recently, a bill was introduced that would require the
CIA and the Pentagon to produce assessments of national security implications of
climate change. These studies would include humanitarian risks as well as the potential
for wars erupting over diminishing water and other resources (Bender, 2007).
Additionally, the CNA Corporation recently released (2007) a report concerning these
same issues, written by a panel of retired admirals and generals representing the varied
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branches of the military. Their findings include that climate change poses a serious
threat to America’s national security, and also acts as a threat multiplier in unstable
regions of the world. It also notes that climate change, national security and energy
dependence are a related set of global challenges.

The Stern Review, a UK-commissioned report compiled by Nicholas Stern, the

former chief economist for the World Bank, details the economic impact of insufficient
mitigating action in relation to climate change. He predicts that increased extreme
weather could reduce global gross domestic product (GDP) by up to 1%. Stern also
handicaps global temperature increases by citing that a rise of 2-3oC. could reduce
global economic output by 3%, whereas a 5oC. rise could have a 10% net loss, noting
this effect would be more significant in poorer countries, and that for worst case
scenarios global consumption could fall by 20%. The solution, which Stern estimates to
cost 1% GDP, is to stabilize emissions within the next 20 years, with a continuous
emissions drop of 1-3% thereafter. Stern concludes “that the benefits of strong early
action on climate change outweigh the costs,” (2006, p.1). He cautions that “the
impacts of climate change are not evenly distributed – the poorest countries and
peoples will suffer earliest and most. And if and when the damages appear it will be
too late to reverse the process. Thus we are forced to look a long way ahead” (p. 7).
Yet Stern is optimistic that should strong global action be taken immediately, there is still
time to mitigate the worst of the anticipated consequences of climate change.

Thomas Friedman, in his New York Times piece, “the Power of Green” (April 15th
2007), makes the convincing argument that “going green” is “geostrategic,
geoeconomic, capitalistic, and patriotic” (p.1). Coining a possible new slogan,
Friedman proudly states his new motto: “Green is the new red, white and blue” (Ibid,
p.2). Highlighting America’s addiction to oil and the lack of progress in combating
climate change in the United States, Friedman proposes that the transformation to
renewable energies can and should result from a confluence of motivations. Whether
one considers the need to stop financing terrorism by filling Saudi oil coffers with US
dollars (which in turn funds radical Islam), or the need to curb fossil fuel emissions in the
fight against greenhouse gases, or the desire to create new jobs by stimulating research
and development for renewable energies, the end result is the same. “Unless we
create a more carbon-free world, we will not preserve the free world” (Ibid, p. 14).

Friedman rightly proposes that in order to stimulate the research and

development needed to transition to renewable resources, affluent countries need to
force their people to pay the full climate, economic, and geopolitical cost of using
greenhouse gas-emitting fuels. In turn, this will stimulate innovation as people seek
sources of clean alternative energies. Governments need to work in tandem with the
free market to encourage development of these new technologies by setting
standards that, once the market has reached them, are increased again. This in turn
will create the efficiency and innovation necessary to eventually drive down the cost of

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alternative energies. Yet Friedman cautions that carbon must have a price, and that its
price must remain high so as to not undercut new investments.

Currently, world fossil fuel industries are subsidized by taxpayers at an annual rate
of over $210 billion, hiding the true cost of these fuels (Brown, 2006). Using this money to
subsidize alternative energies would no doubt prove more beneficial, accomplishing
the dual role of seeding new technologies while making consumers pay the true cost of
continued fossil fuel use. While some may argue that the economy will correct itself, an
economy based on fast shrinking reserves of fossil fuels that have hidden costs due to
heavy subsidies, is an economy based on skewed signals. As Brown suggests, “the key
to building the new economy is getting the market to tell the ecological truth. The
dysfunctional global economy of today has been shaped by distorted market prices
that do not incorporate environmental costs” (2006, p16). Oystein Dahle, former VP for
Exxon Norway now chairman of Worldwatch Institute, has said “socialism collapsed
because it did not allow prices to tell the economic truth. Capitalism may collapse
because it does not allow prices to tell the ecological truth” (“What’s wrong with
business,” n.d., para. 11).

But won’t these proposed changes cost us? Might not these climate models and
oil projections be wrong? Why act and spend large sums of money before we’re
certain of the accuracy of these forecasts? Yes, these changes will cost us, both
financially and quite possibly in the form of personal sacrifice as well. Yes, these
models and projections can be wrong, but climate models are actually proving to be
too conservative in many instances. Yet what is the alternative? Denial? We are
running an uncontrolled experiment on the only home we have. In our private lives we
purchase insurance to mitigate uncertainties – why then wouldn’t we want to insure the
survival of our way of life, and indeed all of humanity to the best of our abilities? Yes, it
will cost, but the real question should be is the cost of inaction acceptable? The course
we follow now will determine the difficulty of the journey before us and the quality of
the future we leave to our children. There are many solutions. The technologies and
knowledge exist now – we simply need to make the decision to require that they be
implemented.

Friedman (2007) proposes a “Green New Deal” where governments encourage

research by providing loan guarantees, standards, taxes, and incentives to spawn
innovation. Yet he also proposes that an ethic of stewardship needs to be adopted.
The issues before us create a unique moral imperative. Because of the nature of our
integrated and interdependent world economy, the fate of all peoples are enmeshed.
As Lester Brown suggests, “we need to recognize that ‘in the national interest’ is largely
obsolete, and look to global mutually beneficial solutions” (2006, p.15). As the largest
consumers of oil (we are less than 5% of the world’s population, but consume 25% of its
oil), and consequently the single largest emitters of greenhouse gases on the planet, we
in the US have a unique burden of responsibility to give back to the rest of the world –
15
 Global Challenges

and especially the poorest nations who will suffer the most for our affluence, albeit
unintentionally.

We are, at heart, a consumer society focused on our immediate needs and

desires. Our actions and decisions betray our inherent belief that everything is
disposable, ultimately even human life - for this is the net effect of our inaction, when
one considers those who are today suffering for our excesses. Robert Muller, Assistant
Secretary General of the UN, has been quoted as saying that “the single most
important contribution any of us can make to the planet is a return to frugality” (New
Road Map Foundation, 1995). This is not a political decision, but a humanitarian one.
History may well look back on this century and regard it as one of unprecedented
challenges, where the converging forces of climate change, peak oil, and the
accompanying issues of social justice shaped a new economy and a new reality.

16
 Global Challenges

Appendix
Climate Change Visuals

17
Global Challenges

18
 Global Challenges

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