Mark Carney’s speech

Mark Carney, the Governer of the Bank of England, gave a pretty impressive speech a couple of days ago. You can read the speech yourself, but I thought I would use it to highlight more of what I was getting at in my post about Emission Reductions.

Mark Carney says the following in his speech:

The challenges currently posed by climate change pale in significance compared with what might come. The far-sighted amongst you are anticipating broader global impacts on property, migration and political stability, as well as food and water security.

So why isn’t more being done to address it?


We don’t need an army of actuaries to tell us that the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors – imposing a cost on future generations that the current generation has no direct incentive to fix.

That means beyond:

the business cycle;
the political cycle; and
the horizon of technocratic authorities, like central banks, who are bound by their mandates.

The horizon for monetary policy extends out to 2-3 years. For financial stability it is a bit longer, but typically only to the outer boundaries of the credit cycle – about a decade.

In other words, once climate change becomes a defining issue for financial stability, it may already be too late.

The basic point that he seems to be making is that we live in a society where, at most, we think a decade ahead. The problem with climate change is that its timescale is longer than that; what we do now will likely have little obvious effect in the next decade, but will impact what happens in the decades beyond that. However, if it appears as though things are okay now, and we can’t see any reason to do anything unless we’ll see impacts in the next decade, then our general tendency will be to simply wait until it’s more obvious that we should be doing something.

Stocker_1The issue, however, is related to the figure on the right, that I discussed in my earlier post on Emission reductions. The figure is based on a basic calculation that assumes a mid-range Equilibrium Sensitivity (about 2.5oC per doubling of CO2), that we increase emissions at a rate similar to that for RCP6.0 (for the next few decades anyway) and that we then reduce emissions at the rate shown on the y-axis, starting in the year shown on the x-axis.

For these assumptions, the figure shows that if we started today to reduce emissions by 1%/year, we could keep peak warming below 2.5oC. If we wait till 2040, 1% per year would only be likely to keep warming below 4oC. Keeping warming below 2.5oC would then probably require emission reductions of 5% per year. The longer we wait, the more extreme the reductions will need to be if we wish to have a reasonable chance of keeping peak warming below some level. Of course, we could follow a different emission pathway, and climate sensitivity could be (probably is) different to what’s been assumed. However, the basic picture doesn’t change; the longer we wait before acting to reduce emissions, the more extreme they are likely to have to be.

There is something else to bear in mind. If you spend some time talking to climate scientists, you will probably discover that most would agree that 4oC or more would be pretty catastrophic. As it stands (and as should be pretty clear from the figure above) keeping peak warming below 2oC is going to be extremely difficult, if not impossible; to have a reasonable chance of doing so would require emission reductions of 3%/year, starting now. If we keep increasing emissions till 2030, 3%/year would only give us a reasonable chance of keeping peak warming below 3oC. Keep going a couple more decades and that’s what we’d need to do to just have a chance of staying below 4oC. If we want to be virtually certain of staying below 4oC, we may need even more drastic emission reductions.

So, if starting emission reductions now is potentially economically risky, what will the impact be if we end up being forced to reduce emissions drastically, simply to avoid levels of warming that could have extremely severe impacts? Similarly, for those concerned about risks to democracy, how risky is it to wait and then discover that keeping warming below levels that could have severe impacts, would require doing things that today would be regarded as unpalatable. Of course, we could be lucky, but that doesn’t change that if we aren’t, we could end up being forced to undertake drastic measures.

This post has got slightly longer and more convoluted than I had intended, but I’ll make one further point. None of the above is policy prescriptive; it’s simply what the scientific evidence is indicating; it tells us what level of emission reductions would be required if we want to have some chance of keeping peak warming below some level. It doesn’t tell us that we must do this, but it does tell us what we will probably have to do, if we do recognise that there is a level of warming beyond which the impacts would be so severe that we should avoid it at all costs. Whether emissions reductions are inconvenient, or not, is irrelevant. How our climate responds to increasing anthropogenic forcings depends only on basic physics, not on our values or wishes. We certainly have control over what decisions we make, but we can’t complain if our climate does what we’d rather it hadn’t; it doesn’t care.

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26 Responses to Mark Carney’s speech

  1. What makes me really want to bang my head against a wall is that the costs the next generation face as a result of climate change are likely to be much greater than the benefit we currently receive from clinging on to fossil-fuelled technology.

    If we could create pressure to wean ourselves off FFs and develop alternatives the future could actually look very exciting—a bit like a second industrial revolution, but this time clean.

    I wonder if we’re the first generation not to look forward to what the future holds?

  2. Jim Lovejoy says:


    I expect the great depression, the 30’s western turn away from democracy, WWII had similar feelings. I know that in the wake of the 70’s oil shocks, there was pontificating that ‘this generation will be the first that the next generation will not be better off than the previous.’

  3. T-rev says:

    I see there was a piece in the Telegraph today, railing against Mr Carney’s speech.

    The comments alone provide good insight into why nothing will be done politically until a significànt minority of those who know we need to mitigate start by doing exactly that. Much like the anti-slavery movement started by people not ‘owning’ slaves, any effective mitigation has to start by people not emitting.

  4. matt says:

    Cool figure. Like to see it from say 1990ish.

    Funny that the more effective those arguing against mitigation because
    – costs of transition will be crippling
    – UN wants to take over the world
    the more likely they will get what (they claim) they fear.

  5. john,
    I agree. There are great opportunities here, which Mark Carney also pointed out. It is a great pity that we don’t see this as a chance to invest in technology and take advantage of human ingenuity.

    That’s actually possible to do. I think we’ve emitted just under 200GtC since 1990. As a rough estimate that would mean that 1% per year starting in 1990 would have given us a chance of staying below 2oC.

  6. Andrew Dodds says:

    johnrussell40 –

    No, fear for the future is a common theme..

    TBH I often feel sad just for knowing the opportunities thrown away, invariably on the altar of short term cost cutting – and if one individual personifies small-minded, ignorant, 3-month time horizion cost cutting, it’s the current UK chancellor, George Osbourne.

    More generally.. the UK had the world’s first civilian nuclear reactor; first general purpose computer; first production jet; even put a satellite in orbit in 1971 – learned about that at the Isle of Wight this year, it’s hard explaining to a space-enthused 7 year old boy that ‘Yes we used to be able to do that, we can’t now’. Everything must be subject to short term ROI; costs must be cut, operations privatised; research cancelled, production outsourced.

    Rambling rants aside, it does often seem that the people complaining at how costly it would be to stop CO2 emissions are the same people who have been systematically destroying the scientific and industrial base that would have allowed us to move away from fossil fuels decades ago.

  7. pete best says:

    We only have to convince the political class of our impending situation and no one else. Ok, so all those meetings since Rio in 92 have not achieved much but at least china and the USA are offering mitigation now. We will come off emissions at some point, maybe 2 or 3 or 4c.

  8. mt says:

    “This post has got slightly longer and more convoluted than I had intended”

    Actually, it’s about as clear as could be and I congratulate you for it.

    Whether that is clear enough is another matter.

    Given that we have, at least roughly speaking, a democratic world, or at the very least, a world with a vast number of centers of power, and that the problem necessitates, at least roughly speaking, a global consensus on what to do, explaining the urgency of the problem is key.

    To those of us who have been thinking about it seriously, the urgency is inescapable – whence the tiresome arguments over a “97% consensus”. It’s impossible for me to imagine how someone could really understand the evidence and not feel a sense of urgency about the consequences. It seems to me like there is a 100% consensus of policy urgency among the people who have a suitable grasp of the situation. The residual 3% or whatever just represent the difficulty of formally establishing a boundary around those who know what they are talking about.

    But most people don’t actually get it. We can show them graphs like this one, sliced and diced in various ways to represent the urgency of the situation, and the forces of confusion show them other graphs, and they get overwhelmed, and default to the middle heuristic – the Truth Must Lie Somewhere In Between. And indeed, with people like Guy McPherson showing up to represent an excessively alarmist opposite to the Climate-Conspiracy extremists, the truth does lie “in between” in some vague sense.

    So when we make clear statements like this one, we find ourselves imagining how people will confuse them and misrepresent them, and try to shore up an argument that to us is overwhelmingly clear-cut.

    We are continuing to fail to tell this story, not because it is unclear, but because there are forces that, sometimes consciously and willfully, and sometimes just out of confirmation bias, and sometimes even out of a misshapen sympathy, systematically muddy the message. We can assuage our consciences with the by now obvious fact that it is intrinsically difficult, that the deck is stacked against us.

    But it’s still, ultimately, the failure of those who understand the parameters of the situation to get the world to understand it that crucially stands in the way of a tolerable outcome (the possibility of an entirely benign outcome having vanished from plausibility sometime in the last decade or so). The task may be well nigh impossible, but it’s us, we who already have a grasp of the nature of the urgency, who are failing to achieve it.

  9. MT,

    The task may be well nigh impossible, but it’s us, we who already have a grasp of the nature of the urgency, who are failing to achieve it.

    Somewhat reminds me a little of why I started this (although that wasn’t all that well thought through, to be honest). Need to remind myself of this a little more often, since it is easy to get bogged down in all the silliness that can surround this topic, especially online.

    Something I will add, though, is that there are clearly attempts to deligitimise anyone who does speak out, on the basis of them losing their objectivity and their work being labelled as politically motivated. I do understand why many would rather not, but at the end of the day it doesn’t change that we are indeed failing to get across what is ultimately a reasonably simple – and understandable – message.

  10. russellseitz says:


    At face value the purple sector of your graph suggests a business as usual rise of 10C over the next 35 years.

    Do you really expect to see any of those degrees in the next decade ?

  11. Russell,
    No, that’s not what it’s saying. The graph is estimating the amount of warming if we increase emissions at 1.8%/year until time t_o, and then reduce emissions at the rate given on the y-axis. The purple region is essentially the region in which the combination of start year and emission reduction rate is such that the cumulative emissions are such that our peak warming will eventually be that high.

  12. pete best says:

    Too many people who have the ability get renewables taken up in earnest dont like the technologies on offer, nor do they like the idea of the electorate cutting back on energy usage or their purchases of all things worth going to work for.

    Shale oil, green coal (CCS), cleaner fossil fuels,rather than vast solar farms, wind farms, csp sites, etc

    Its all looking a bit bleak so hopefully china and the USA will bail us out. Not likely if republicans win power

  13. @Jim Lovejoy.

    In 1970 I remember taking my 1948 Series 1 Land Rover on a tour of Scotland following General Wade’s military road. I kept a diary/log. I note that I could buy three gallons for £1 and could fill the tank for less than £2. Five years later petrol went past £1 a gallon. I agree that it seemed like the end of the world, but it was all about economising and adapting. There never any suggestion of an existential threat.

    @Andrew Dodds

    You say fear of the future is a common theme, but that’s the sort of thing those in denial say. I’m sure you’d agree that this is different and there are genuine and logical reasons to be apprehensive? Actually if I was selfish I wouldn’t care because I’ll probably be gone in 20 years. But I’m just guilty that although I’m aware, people aren’t listening.

  14. Gingerbaker says:

    “So, if starting emission reductions now is potentially economically risky”


    This is the denier’s universal assertion, but whether there is any truth to it whatsoever is a question that should have been answered a decade ago. (Personally, I don’t see a lot of risk in eliminating ~$1.5 trillion worth of U.S. fossil fuel spending every single year). Curiously, it seems nobody in Bloggsville seems very interested in grinding out this most elemental inquiry. They would evidently rather frothily argue about facts with the dishonest, or continue their scientific investigations into climatology to the fifth decimal place.

    But the time to start building a new carbon-free energy system is now. And we don’t know the first thing about how much it will actually cost, or how it should be planned, or financed; what utility business model should be followed if any, or at what price the resulting electricity should be offered; whether the new parallel energy system we all agree we need should be wholly public, wholly private, or something in between.

    We all could actually have a say in whether it should be designed expressly as a non profit government service, and how it might best be financed egalitarianly. It is our baby – we will be paying for it one way or another. Or we could just do what we currently doing – not address these questions, and let our quasi-public electric utility system slowly fall into the hands of laissez-faire capitalism.

  15. mdenison says:

    “…we live in a society where, at most, we think a decade ahead…”

    Really? I see major works public and private, like motorways, mainline railways, trident, aircraft carriers, power plants, car factories, the Shard , port infrastructure (air sea & rail), the Thames barrier, flood defences, reservoirs, schools, hospitals, houses, the channel tunnel, bridges … … … being built with lifetimes measured in decades with upgrades/changes every 10 years.

    All levels of our society are used to the expense and time scales involved in this and have been for a long time. There is no more serious economic risk involved in investing in carbon-free energy than in the above. If we were so worried none of the above would have been invested in either. Non of it is small , nor cheap and some is a lot more expensive than a green power plant.

  16. mdenison,
    Okay, a fair point. Some of that does indeed seem to be focused on more than a decade (although, a decade here was meant to be “about a decade” rather than exactly 10 years). However, how many of the examples you mention are quite crucially dependent on government funding, rather than private enterprise?

    I must admit that I don’t quite follow what you’re getting at in the latter part of your comment. Although no expert, my view is that if we really wanted to go ahead and address this issue, we would simply do so and it wouldn’t necessarily be any more expensive than other major infrastructure-type projects we’ve done in the past. Is that what you’re suggesting too?

  17. mdenison,
    Actually, let me clarify something. The point isn’t whether or not what we might do will last for a decade or more; it’s more to do with whether or not it will have any impact/benefit in the coming decade. So, your examples may not be quite as relevant as I first thought.

  18. izen says:

    That commercial planning rarely has a time horizon beyond a decade is obvious. The economic bottom line is tied to the human scale of the need to see significant gain within 10% of your likely lifespan.

    That infrastructure gets built by industrial enterprises and government with much longer timescales is in large part logistical. To meet a commercial need for satisfaction within a decade may result in building infrastructure that can outlast (with maintenance and repair) the original purpose The Forth rail bridge and the Shard might be examples. Constructed to meet decadal economic targets it is inevitable that something strong and stable enough to work for that long is going to be strong enough to work for much longer without any significant extra cost, or significant savings from making it weaker and more likely to degradation and obsolescence.

    There is still a big difference in how business and governments plan for the future compared with the perspective we have on the past.

    The Thames barrier was designed in the 1970s to protect London against flooding. First the cost and feasibility of protecting against various levels of flooding was researched. Given a limited budget, what could be built?

    Then the various predictions of future sea level rise were considered. About a yard in 100 years was considered as the upper end of the possibilities. Something that would last for about 80 years with maintenance and would be effective against that level of sea level rise was possible within budget.

    This may appear to show that a government can take a much longer term view, however the budget is set by the 10 year economic perspective that governments tend to share with the financial businesses. A barrier that lasted for only 50 years and would only defend against 0.5m of sea level rise would not be half the price, the apparent 80 year perspective is just the optimisation of the 10 year economic constraints because of the inherent physical constraints of building infrastructure to do the job.

    While we all can see and understand the impact and effects that government and industry actions have had in the past on timescales far longer than a decade, there remains a myopia justified(?) by the uncertainty about the equally profound impacts that our present actions will have on the future as revealed by the graph of outcomes from cumulative emissions.

    It is difficult to decide whether this is an innate limitation of human cognition, or a socio-economic artifact imposed by financial ‘logic’.

  19. izen says:

    Oh look, no need to worry about our cumulative emissions anymore, scientists have discovered that all this ‘global warming’ is just the Sun.

    Or mostly the Sun? (sarc/off)

  20. Pete Best says:

    Izen. that paper says author is Willie Soon.

    Do some research will you as posting what you have is just not necessary

  21. Pete,
    I think Izen knows all about Willie Soon. His comment was almost certainly intended to be ironic. I’ve also spent quite a fair amount of time discussing this with one of the other authors a year or so ago. It was – as might have been expected – a waste of time.

  22. izen says:

    Yes, irony…

    After discussing the problems of responding to the scientific analysis of AGW by governments/industry because of the timescale of planning and spending that seems to be inherent, I encounter the Soon et al paper.

    I am well aware of Soon and his history, and why this paper is of almost no scientific value. However that does not detract from its rhetorical value within the larger context of engendering, (or obstructing) action on the policy front, especially for that side that do not want to see any requirement to act outside the 10 year economic horizon.

    At least Mark Carney and the cumulative emissions data engage with reality…

  23. Have you seen Kevin Anderson’s most recent talk? “Delivering on 2°C: evolution or revolution?”

  24. I think I have seen that. I’ll have another look when the rugby is finished 🙂

  25. russellseitz says:

    Soon writes crap papers not to confuse Carney, of the Bank of England, but to provide Carney of the Wall Street Journal with op-ed fodder

  26. This is a comment on an old post, but it seemed the best place to file this information.
    There are three organizations working to urge companies to fully disclose risks of climate change to their businesses, and to making a formal framework for sustainable practices. These are:
    * The Sustainability Accounting Standards Board
    * The Climate Disclosure Standards Board
    * The Task Force on Climate-related Financial Disclosures

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