Select Committee on Economic Affairs Minutes of Evidence

Examination of Witness (Questions 232-239)

Dr Terry Barker

22 FEBRUARY 2005

  Q232Chairman: Good afternoon. Thank you very much for coming along to help us with our inquiry. We have all read your biographical details and we have a number of questions that we would like to ask you. But is there anything that you would like to say at the beginning to set us off, or are you happy to go straight into the questions? I am also asked to say to you not only how welcome you are but also could you speak slowly and speak up so that we can get an accurate record of what you are going to say to us.

  Dr Barker: Thank you, my Lord Chairman. It is a very great privilege to be here. I have considered the questions, and in fact I take it that these questions are just to set the stage really, and I have considered them and given replies. So I regard this as a fairly informal discussion.

  Chairman: Absolutely. The script of your answers which we have—and I do not think it has been circulated—the clerk and the Chairman have a copy of what you said and we shall check what you say now and what you said then to see whether you are still consistent![1]

  Lord Lawson of Blaby: Why has it not been circulated?

  Q233Chairman: It only came about 10 minutes ago. So if I may start by asking the first question. We understand that you are involved in the IPCC chapters on economics. Could you tell us what role you have played and also what are your impressions of the IPCC process? We have heard that sometimes there is a large gap between what the authors say and what gets put into the Policy Makers' Summary, and we wondered what your experience of that was?

  Dr Barker: I have been involved with the IPCC for the last 10, 11 years. I knew about the Second Assessment Report, which was published in 1995, but I was not actually involved in writing it or even reviewing it. I then came into the Third Assessment Report right at the beginning and was involved in the process leading to the choice of the Lead Authors on the Synthesis Team, writing the Synthesis Report, and it was obvious to me that the effect of mitigation on the world's oil and coal industries was not being properly represented. I suggested at an open meeting that there should be a proper chapter which fully looked into the literature on the effects on the world's oil and coal industries because clearly they were likely to be the industries which would suffer the highest costs from mitigation, especially sudden and deep mitigation. The outcome of that was that a chapter was created, which showed to me immediately that it was a very responsive system and, of course, the way these things work, I was then put forward in a peer-review process to coordinate the chapter. I saw that through to the end and was then put on to the Synthesis Team, which looked across the whole of the IPCC Reports, covering both the science of climate change, adaptation and mitigation, and I was in the writing team of that as one of the few economists on it. That came to its conclusion in a meeting in Wembley in 2001, at which I was on the platform essentially representing the scientific views of the scientists to the roles of governments on questions of costs and mitigation. Now I am on the Fourth Assessment Report and I am Coordinating Lead Author for the chapter on "Mitigation from a cross-sectoral perspective", which is essentially a synthesis chapter, bringing together about six to seven chapters on different aspects of mitigation—mitigation for buildings, for transport, et cetera.

  Q234Chairman: One or two people have rather suggested to us, in giving evidence earlier, that there is sometimes a gap between what the authors say and what gets put into the Policy Makers' Summary. Am I right to deduce from what you say that you do not think that that is a very fair criticism, or do you think there is a gap?

  Dr Barker: The IPCC is basically providing scientific advice to world's governments; that is what its job is. But part of the process is—and it comes right at the end, after the Reports are written (governments do not have a say in the actual detail of the Reports)— that governments do have a say in the Summary for Policy Makers. The Summary for Policy Makers is taken extremely seriously by governments and it is a line by line acceptance, and each word can count, and the process can actually collapse if governments will not accept a particular phrasing, a particular word. You might imagine that certain governments might be extremely sensitive about the costs of climate change because their whole policies are based on an argument that the costs are unbearable and they cannot participate because of that. Therefore, this can give rise to substantial pressures and tensions when the scientific community is saying that the costs are negligible, and yet an important government's policies are based on the argument that they are not negligible. Therefore, obviously something has to give because governments can refuse to budge and some governments do refuse to budge and they are in a position to break the process. So then what will happen? Of course there is uncertainty about these findings, they are not cast in stone. So what happens is that there is a political process which uses words which can have different meanings for different people and the outcome is a Summary for Policy Makers that everybody will sign up to.

  Q235Chairman: So to some extent the pure scientific advice gets moulded down in some way?

  Dr Barker: I would not go as far as that. The scientific advice is in the technical summaries, which are accepted as a whole by governments, are in the Report itself. But the Summary of Policy Makers is an outcome of a political process in which governments have a large part to play.

  Q236Lord Vallance of Tummel: Dr Barker, not surprisingly as a Select Committee on Economic Affairs, we are very much interested in the costs and benefits of tackling climate change. Previous witnesses have suggested to us a range of different means of tackling the change and a range of different costs associated with those changes. If we can start with the costs first, we would quite like your opinion on what the range of options are, what the costs might be, what degree of uncertainty surrounds the costs and whether the uncertainties focus upon scientific uncertainties or uncertainties as to the economics or the methodology of netting the costs?

  Dr Barker: That is a very substantial question and you obviously want me to give a very short answer. First of all, I want to restrict my answer to macroeconomic costs, costs for a whole economy like the UK economy or the global economy, or a European economy. So I am not talking about costs for a particular industry. This is a macroeconomic question and of course macroeconomics has its own way of answering these questions. The first thing I would say about it is that there are a lot of uncertainties about this and there is a large literature on it. The literature is influenced in subtle ways by those who have paid for the research. Research can be very broadly divided—and this is rather simplifying—into first the research that was undertaken in the period leading up to the US Senate's decision not to ratify the Kyoto Protocol: a large amount of money was spent on research up to that period using models, largely in the United States, and the underlying raison d'être of that research was to demonstrate that the costs could be very high, and indeed a lot of the results came out with very high costs; second, there is another body of literature which is centred about the European Union and is funded partly by the European Commission but also by European governments, which is looking essentially at ways of cutting down those costs—how economic policies can be devised to ensure that these costs are as low as possible. This literature tends to come up with results which are wider in scope and broader and is looking for ways of reducing these costs—and there are many ways of reducing costs. So there is uncertainty in what the costs are; there is a subtle bias in the literature depending on what the focus of the research is, whether it is to look for costs or to look for ways of reducing costs. My view is that given a long enough time to adjust—and it is a long-term problem and the mitigation options are long-term policies—and given that the policies might be well designed (and that is a big assumption) and that the policies would be expected, given all of those three, then I think that the costs are likely to be negligible and in fact it is very likely that there could be benefits from even deep mitigation, substantial decarbonisation of the world economy. Does that answer all of your questions?

  Q237Lord Vallance of Tummel: Not quite. The IPCC economists are unpaid; is that right?

  Dr Barker: I get expenses from the Department of the Environment.

  Q238Lord Vallance of Tummel: So there is no nuance there?

  Dr Barker: There are nuances in all things we do, but the IPCC is largely voluntary and largely unpaid, yes, where you get the experts.

  Q239Lord Skidelsky: If, as I understand you to say, the costs of avoiding climate change are likely to be negligible, then any benefits are net, virtually. There seems to be uncertainty on the part of the IPCC in trying to quantify these benefits in monetary terms. Do you share that uncertainty? What is the degree of uncertainty and why does it appear that these benefits cannot be stated in monetary terms?

  Dr Barker: There is of course substantial uncertainty throughout the whole process, from the emission of the greenhouse gases, to its effect on the climate and then the effect of the climate on the human systems, and then how we adapt. There is uncertainty throughout this because this takes place over a long period of time and we do not fully understand how the climate system works. When there is an attempt to monetarise all the costs and benefits of climate change there are two problems. One is that we are monetarising—let us put it simply, let us do it in terms of loss of human life because there are other costs as well as the costs of human life— the loss of human life. The flood defences of Bangladesh might collapse with a storm which is partly the result of high sea levels, etcetera, so there is some likelihood this is due to climate change. This causes a substantial loss of life and eventually, if this goes on long enough, people have to move out of the settled areas of Bangladesh. The problem is, how is this loss of life to be valued? How is this to be put into monetary terms, because there is also potential loss of life in other parts of the world? How do we add this up? What values do we put on it? This became a very substantial controversy in the Second Assessment Report and it was a controversy because the cost benefit analysis came up with estimates of the value of human life, which were very substantially different between different countries. It really depended where you lived as to how much you were worth in terms of this calculation. This was put forward as scientific expertise to the IPCC and some governments—in fact eventually many governments—objected to this because they did not see why their citizens were worth a fraction of those in other countries, and this eventually led to a very substantial crisis for the IPCC, with the threat that the Report might not be produced. I was not there, I just read the reports and heard from people who were there. It produced a lot of controversy and a lot of emotion. The outcome of it all was that the IPCC is very reluctant to engage in that controversy again because the proponents on both sides are still there and obviously still willing to have another fight if the opportunity was given to them. That is one of the problems. The second one is involved with the valuing of life for different generations. Should we be valuing the life of future generations higher than we value our own lives, or lower? So you can see the potential problem of controversy there as well because we are less certain about them, and we can hardly move out of the emotional element of it by talking about statistical lives, but, nevertheless, there is a major issue. So it is an issue of ethics, of economics, of politics, how we value it across different societies and different cultures. This gives rise to a lot of ethical uncertainty in addition to all the other uncertainty we have.

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