Select Committee on Economic Affairs Minutes of Evidence


Examination of Witnesses (Questions 160-179)

Dr Rajendra Pachauri

1 FEBRUARY 2005

  Q160Lord Lawson of Blaby: By "the bulk" what do you mean?

  Dr Pachauri: I would not be able to give you an immediate answer. I can submit it in due course.[1]

  Q161Lord Lawson of Blaby: I think it is only fair to ask you this because, as you know, our next witness is Professor Lomborg. He will be able to comment on anything you say because I suspect he is here now, but I have been told—I am sure this must be wrong—that you compared Professor Lomborg to Hitler. Is that true and, if so, why?

  Dr Pachauri: I am sure you would know, having been in public service for a long time, if one believes everything that the media says one could be misled. I made no such comparisons. I was interviewed by two Danish journalists and we got into an extensive discussion. There was some discussion about the way Hitler treated human beings but it had nothing to do with Professor Lomborg's behaviour. I drew no such comparison and I was quite surprised when this was broached.

  Q162Lord Lawson of Blaby: You would not cast any aspersions of any kind against people who in good faith disagree with your analysis?

  Dr Pachauri: Absolutely not. As someone who has spent the best part of his life on research, I would be to say the least very ill intentioned if I were to say that anyone who disagrees with me has some evil design behind it.

  Q163Lord Goodhart: You have been asked about the question of non-believers on the IPCC. How strongly do you think the IPCC is influenced by people at the other end of the spectrum? Perhaps I could describe them as those who have a philosophical belief in the virtues of the simple life and would therefore support reduced energy use in any event, quite apart from the question of global warming.

  Dr Pachauri: I am not sure we seek out such persons because after all it is governments who nominate the authors of the IPCC and I presume they carry out a process of some selection where they look at the capabilities and research records of these distinguished individuals. We carry out a very thorough process of scrutiny in which I can assure you there is no place for political beliefs at all. We only look at the scientific record of the individuals who are to be drawn into this process.

  Q164Lord Elder: I would like to ask you about the consensus which appears to be on global warming science. It has been suggested to us that the consensus has been at least to some extent reinforced by the relative ease with which people who believe in the consensus get funds for their research from governments and the European Commission. Do you think that balance of availability of funds for research has somehow affected the strength of the consensus?

  Dr Pachauri: Research has to depend on funding that is provided, whether by the European Union or individual governments or other international organisations, but that does not in any way distort the objectivity and honesty of the scientists who are working on it. May I take the liberty of suggesting that any such allegation would be a slur on the dignity and the integrity of the scientists who are working on it. Every scientist depends on funding. If international organisations or the European Union or governments feel that climate change research requires substantial funding, that is the only means by which you can draw specialists and scientists to work on the subject, but I do not think any funding organisation lays down a condition that you have to become a believer in climate science. These are people of some integrity, some solid, intellectual capability. I doubt if they would get thwarted in their values purely because funding is available. It is probably easier to get funding for so-called sceptics these days. Without naming any organisations, if I were to go on to say, "I do not believe in climate change science; can you fund me to debunk whatever the IPCC is doing?" I can assure you I can raise a few million dollars without difficulty.

  Q165Lord Elder: Would you consider it would be equally easy to take these views across once the research was done or even easier perhaps than that side of the argument?

  Dr Pachauri: I do not know.

  Q166Lord Skidelsky: Are you suggesting that scientific opinions are entirely unaffected by the source of funding? It is a disinterested study which has only scientific criteria behind it and scientists are never influenced by where their funds are coming from?

  Dr Pachauri: If we rely only on peer review literature as the IPCC does, whatever is published does go through a process of peer reviewed. Unless the entire scientific community is corrupted, I cannot possibly believe that something that is published in a journal of some standing, where people make an honest effort to be counted, could not be scientifically valid. This is a general statement. Possibly there are some that could slip through but the general body of literature in this field, as in any other, where you go through a process of peer review would probably be totally defensible and carry a high level of integrity and credibility.

  Q167Lord Goodhart: Compared to the science of climate change, where there is a consensus it seems, we hear less about any consensus on the economics of climate change. Do you think there is a consensus about the economics and, if so, what do you think the main features of that consensus are?

  Dr Pachauri: One area where I think there is a growing, strong consensus is in respect of the cost of mitigation of greenhouse gas emissions. I believe if one were to look at options by which you could reduce emissions there are so-called no regrets options, so-called negative cost options, where you can bring about efficiency improvements and technological advances by which, without in any way affecting human welfare in a negative direction, you could reduce emissions. There are ample studies to show that this is done. I lived in the US in the early seventies and I recall vividly the period that we went through with the first oil price shock. Everybody thought that the economies of the world would collapse as a result but there was such a resilience in terms of new technologies being developed, in terms of efficiency improvements in the use of energy, that pretty soon the world was on track. That is only a small period I am referring to, but if one looks at a whole range of examples, even in the developed countries, there are enormous differences in the technologies that are used and the relationship between energy use and GDP. One can allow for differences in climate and so on. There are some countries where you need much more space heating and so on but I think today there is an enormous opportunity by which you could reduce emissions without incurring significant and in some cases any costs at all. A lot of these options have substantial local benefits. It is often pointed out that if China and India were to go the way of the developed world, look at the number of cars we would be running on our roads and streets. I see no reason why we should adopt that path. There are enormous benefits in setting up efficient public transport systems which will create local environmental benefits, which will reduce congestion to a large extent, which would make transportation and locomotion available to the poorest of the poor who cannot possibly afford privatised transportation or private vehicles. Quite apart from the costs involved which in a number of cases are extremely low if not negative, there are also substantial local benefits or co-benefits from several of these measures. There is a growing body of literature on the economics of these options, not to speak of possible technological changes in the future which at the moment cannot even be estimated. On the adaptation side, yes, the impacts and the adaptation area are where a lot more economic analysis is required. I am afraid when you deal with issues of morbidity and mortality you run into a very serious ethical issue. How can you value human life? Professor David Pearce is here. He knows some of the heat that was generated in trying to come to grips with an evaluation of morbidity and mortality in different parts of the world. On impacts and adaptation, I concede there is a lot more work that needs to be done and I hope social scientists will get involved in this on a much larger scale.

  Q168Lord Skidelsky: I want to listen to your opinion on two key assumptions which underline the emission scenarios produced by the IPCC. For example, some argue that the convergence assumption is a piece of political correctness and it is not realistic to suppose that poor countries' and rich countries' incomes will be equalised by 2100. Others say the report makes inappropriate use of a market exchange rate approach to aggregating incomes and that purchasing power parity should have been used; and that these two assumptions result in an exaggeration of emissions projections. Can you let us have you view on this and how far was this debate conveyed to you as chairman of the IPCC?

  Dr Pachauri: I have been involved in this debate right from the moment I took over as chairman of the IPCC. As a matter of fact, we organised a meeting a couple of years ago in Amsterdam where I took the initiative of inviting two of our critics on the methodology for coming up with these scenarios in the hope that we might be able to arrive at some agreement. I would like to point out two issues here. On the question of the down-scaling of growth rates, I am afraid there has been a bit of a distortion of facts. There is a website that is maintained as an assistance to the IPCC in which some years ago people down-scaled growth rates and came up with some estimates for countries in Africa and elsewhere, which incidentally were not approved by the IPCC. They do not represent the work of the IPCC; it is only as a form of assistance to the IPCC and IPCC researchers. The controversy started with some conclusions that were drawn from those totally non-IPCC, unauthorised data that were available. On the issue of whether there would be a convergence, we have data on the long term growth rates of several countries. If you look at Korea, Japan and some of the others, they fit in very well with the scenarios that we have come up with. Today, if one looks at the estimates drawn up by Goldman Sachs on Brazil, Russia, India and China, their projections clearly indicate that by the middle of the century these countries are going to be fairly major economies in the world. More recently you have probably read about the CIA report which more or less comes to the same conclusion. I would suggest that the scenarios developed by the IPCC are certainly not out of line with what we see happening in the rest of the world. All this is drawn on the work carried out by several models, by several projections that have been developed by a very competent set of researchers. Nothing that we have produced is on the basis of research by anybody in the IPCC itself. It is on the basis of peer reviewed, model-driven literature which has gone through the usual processes of review and acceptance. On the question of PPP versus market exchange rates, our critics do not mention that we did have some PPP-purchasing power parity-related model runs which did not deviate significantly from what we have achieved from the other models that have been used. The use of purchasing power parity is not such a simple matter. It is a very useful device for looking at welfare levels across different societies at a given point of time, but when you are making projections for the next 100 years, how does one alter the parity between market exchange rates and purchasing power parity, particularly as economies develop, where this relationship will change over a period of time? Subsequent to all this criticism, several of our colleagues in the IPCC have carried out runs, which incidentally have now been published, using purchasing power parity, and there is hardly any deviation between their projections and what we have.

  Q169Lord Skidelsky: So the critics have influenced the methodology. In other words, they have stimulated the IPCC.

  Dr Pachauri: We welcome that. It only validates the methodology that the IPCC used earlier. It does not require any deviation from it.

  Q170Lord Skidelsky: What strikes me is that the convergence scenarios are historically blind. If you take a long period going from 1600 through to the 19th century, you start from a position of convergence between the major economies of the world at that time and then there is a process of increasing divergence and the forecast is that this will now be reversed and that you will get increasing convergence. There are so many intervening events here, I do not know how you can make any kind of projection with any confidence.

  Dr Pachauri: If one looks at the 20th century, I am afraid there has been a sharp departure from what one saw from the 17th century onwards. We are dealing with a period when there is much greater flow of capital and technology. There is also an accretion of human capital in different parts of the world. We are dealing with a totally different world. What we have based our scenarios on and the models that have provided us the ammunition for these scenarios is essentially work that has been done in the 20th century, going back in time and seeing what would happen in the 21st century. The extensive literature that we have used in arriving at the scenarios for the future is based essentially on fairly solid work which relates to the modern day world.

  Q171Lord Sheldon: You may have had solid work in the past but 100 years into the future there are things that are completely unknown. It surprises me that you have thought of taking this so far ahead. I can understand the next 30 years. One can make some reasonable assumptions but much beyond that and one is almost in dreamland, I would have thought.

  Dr Pachauri: It is for this reason that we have a range between the lowest levels that might be attained versus those that are at the upper end. It is fairly plausible to come up with scenarios of the future. After all, there are modellers; there are economists, who are grappling with these problems on a continuous basis. It is really the work that they have carried out which has provided us with the basis for our scenarios. To be quite honest, one really does not know what will happen five years in the future but, given the momentum of economic activity worldwide and a set of plausible assumptions where even businessmen have to make projections, several companies are looking at the year 2050. These are companies that are driven essentially by their objectives to maximise profits in the next quarter. If one is looking at global challenges, clearly as a species we need to look at what is likely to happen 100 years from now.

  Q172Lord Sheldon: In the beginning of the last century, it was thought that coal would be running out and the world would change fundamentally in the next 100 years. That has not happened because of changes in power supply. All sorts of things can happen in this period which render completely useless some of the projections that can be made so far into the future, surely?

  Dr Pachauri: We have had major changes. Who knew that nuclear power would come into existence?

  Q173Lord Sheldon: Exactly.

  Dr Pachauri: Similarly, with our knowledge today, we can certainly project what kinds of changes might take place in the use of renewable sources of energy, whether there might be a resurgence of nuclear energy, so all of these things have been taken into account in giving us the range of projections that we have come up with. Nobody can swear by it but it is something that is based on some fairly strong assumptions and fairly plausible factors that might bring about changes. It is for this reason that we have a range. If we are looking at an issue like climate change, I am afraid we just have to go that far into the future because what has happened so far goes back to the beginning of industrialisation. The accumulation of greenhouse gases in the earth's atmosphere has taken place cumulatively over this period of almost a century and a half and therefore we have no basis but to look at the end of this century.

  Q174Chairman: Since we started this study, I do not think you have any difficulty in persuading us that some of these projections are pretty difficult to arrive at. If you were to look at the figures produced, what sort of assumptions have been made about what is going to happen so far as nuclear power is concerned in the next 50 or 100 years? What view does the IPCC take? I ask this question because I read somewhere last week that China is planning to build 300 nuclear power stations. There are only just over 300 in the world at the moment. These are massive decisions that may or may not be taken, as far as I can see. How do you project all that stuff into your future?

  Dr Pachauri: It is based essentially on the work that has been done by a whole range of researchers and that has been published. Given that China is growing very rapidly, there is a substantial amount of work that is being done to look at China's energy future. Within that, there are all kinds of possibilities that have been put forward, modelled and looked at in terms of the implications. We have just taken all of that into account in developing our scenarios for China, for India and other developing countries, and of course for the developed countries as well. It is the aggregation of substantial research that has been done across the world and that is the best we can do.

  Q175Lord Layard: We have been talking mainly about the IPCC, its procedures and its conclusions. I wonder if you could say a little about what your own personal view is both on the science and what has been going on and what are the things which seem to you to be the most likely; also, what kind of forms of mitigation you think would be the most cost-effective if there is a real problem.

  Dr Pachauri: There is a whole range of options that are possible. I will not mention the country that I went to but, for example, it took me two hours to go through immigration and there was a car waiting to receive me. The person who was waiting to receive me said, "I thought you had not arrived." I said, "It took that long getting through all the procedures." He took me to the parking lot. The engine was running. The air conditioner was running. He said, "It is a warm day. I thought I should keep the car cool." There are simple things like just changing habits of this nature. I was in Korea three months ago and the chairman of one of the major companies said he went and saw this movie The Day After Tomorrow, something that I do not necessarily support. He said, "My son came home with me after watching the movie and said, `I am going to switch off all the lights because I do not want to contribute to climate change.'" I am just giving these examples as means by which human beings can cut down on something that I feel is a waste of energy without in any way reducing human welfare. There are also means by which I look at my own country, India, where if we were to expand the grid to supply electricity in the villages, on a rational, economic basis, that really would not be the best option in several parts of the country. We have an enormous quantity of biomass. We have wind. We have solar. Technologies are being evolved and I am prepared to sit down with anybody and show that these would be economically viable. Unfortunately, the policy framework does not give you the kind of signal to move in that direction and therefore we also need some changes in pricing systems, whereby we take into account the real price of electricity from the grid, the externalities that are imposed. So there is a whole range of things that could be done and I do not think they would in any way lead to loss of welfare of any community.

  Q176Lord Lawson of Blaby: There is an institution known as the market which gives signals. If it is clear to you that for example there are significant things that could be done where it would be cheaper to do something new, why does this not happen?

  Dr Pachauri: The market very often does not take externalities into account. There are also subsidies in several goods and services which are very difficult to remove. If you take nuclear power, in most countries in the world it is heavily subsidised in one form or the other. If one looks at the price of energy produced by nuclear power stations, it is really not an accurate reflection of what it costs in the market. Rationalising prices is particularly important. Also, an area that we need to look at carefully is the whole issue of energy security. If we look at the projections of the International Energy Agency, it clearly projects that by the year 2030 the bulk of increase in supply of oil will be coming from a handful of nations in the Middle East, where production will have to go up from something like 19 million barrels a day to over 50 million barrels a day. That is almost a three fold increase. If the world is going to get dependent on oil imports from a very small part of the world, there are issues of energy security that somehow need to be factored into policy.

  Q177Lord Lawson of Blaby: I am aware of these. I was for a time, like our Chairman, Secretary of State for Energy in this country some years back. From your rather dismissive remarks about subsidies, do we take it that you are not in favour of subsidies to those methods of power generation which do not create emissions?

  Dr Pachauri: I would be in favour.

  Q178Lord Lawson of Blaby: That is what nuclear power is.

  Dr Pachauri: Fine. I agree, but that should be done explicitly. If it is for this reason, I would fully accept the fact that you are building an externality which is associated with, let us say, coal-based power generation, into the cost of coal-based power. Therefore, nuclear comes out cheaper. I fully appreciate that. Whether one looks at a form of taxation or subsidy are two sides of the same coin.

  Q179Lord Lawson of Blaby: Can I ask a quick question about "futurology", the difficulty of looking ahead? What do you do to try and predict changes in technology and the economic effects of changes in technology? It seems to me very difficult. Again, based on my own experience, there have been enormous improvements and technological developments in the carbon-based energies which have made them very much cheaper than they used to be. How much have you factored in for that, for example?

  Dr Pachauri: That is a very difficult challenge. I appreciate that and, if I can express a personal opinion, I have an enormous interest in technology issues. In the fourth assessment report of the IPCC, technology is one of the cross-cutting themes among seven such cross-cutting themes that we have looked at and that we are including. We need to look at technology and the potential it is likely to bring very carefully. I fully appreciate that we are really gazing into a crystal ball. It is very difficult to say what the impacts of technology will be in the future but at least over the next 30 or 40 years we might come up with some intelligent estimates that could be taken into account.


1   No supplementary evidence received. Back


 
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