Nov 7 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - The Economic Times, India

The consequences of global warming may have always been an issue of debate, but the latest report prepared by the former chief economist at World Bank, Nicolas Stern, seems to have taken the world by storm.

Referred to as the economics of climate change, the report says that the impact of global warming on the world economy can be as apocalyptic as that of Great Depression of the 1930s.

Mr Stern has said that in the absence of significant cut in greenhouse gas (GHG) emissions, the world economy will shrink by a massive 20 percent in decades to come. The rising temperature leading to floods may also displace about 200m people globally.

The findings suggest that industrialised countries have contributed significantly to global warming. In the recent years, developed nations' contribution to GHG emissions has been rising by around 2.4 percent. It clearly states that the Kyoto protocol is not enough.

The report recommends that each country needs to spend 1 percent of its GDP for reducing GHG emissions. The research work, which argues that climate change represents the "greatest and widest-ranging market failure" ever seen, also offers some potent suggestions.

One of the recommendations is fixing carbon pricing through taxation "so that people are faced with the full social costs of their actions". Another remedy calls for greater global use of technology policy in the fight against global warming. It also suggests that barriers to energy efficiency should be removed.

The report instantly became a subject of heated global debate. While the UK government has strongly supported the research and the US White House Council on Environment Quality is reported to have appreciated the work, OPEC and Australia have found no scientific and economic basis of the report.

Indian environment activists are, however, exhorting the report that has found fault mainly with developed nations. "For once, a western report has not namecalled India and China," says Sunita Narain, director, Centre of Science and Environment. In support of the report, she maintains that it is the industrialised nations that need to reduce emissions considerably.

The report can also generate more understanding about the topic in India, which is expected to suffer significant losses due to the rise in temperature. "This is balanced and an unbiased report which raises quite a few potent questions. It can advance research on the topic in India as well," said RK Pachauri, chairman of Intergovernmental Panel on Climate Change.