Among all of the bleak commentary on global warming, today’s third report of the Intergovernmental Panel on Climate Change provides some very good news. In contrast to previous reports of the IPCC’s Working Group III, the latest is much more optimistic about the prospects of avoiding the worst effects of global warming.

It concludes that sharply reducing global Greenhouse gas emissions over the next decades can be achieved at very low economic cost. For example, cutting emissions by 50% by 2050 can be had by sacrificing only one to two years’ economic growth.

Put another way, if the world economy grows at 3% per annum through to 2050, then, without any measures to reduce Greenhouse gas emissions, global GDP will be around 350% higher than it is now. With measures to stabilise the concentration of Greenhouse gases in the atmosphere at 550 ppm, the report’s figures indicate that global GDP will be ‘only’ 348% higher.

But 550 ppm is still too high to avoid dangerous climate change. The report of Working Group I in February indicated that stabilising at 450-500 ppm would be much less dangerous. According to today’s report, measures to keep Greenhouse gas concentrations to this more stringent target would see global GDP grow by ‘only’ 345%’.

The report suggests that the carbon price needed to achieve the reduction to 550 ppm would be in the range US$20-50 per tonne of carbon dioxide. This would see petrol prices increase by 4-10 Australian cents a litre and electricity prices for householders rise by  2-5 cents a kilowatt hour on top of the 12 cents or so they pay now.

These are only the economic costs of cutting emissions, without taking account of the economic benefits of avoided climate change. Although cautioning about the uncertainty in making judgements in the absence of more studies, the IPCC report concludes that “even for the most stringent of stabilisation pathways assessed” the costs of reducing carbon emissions are comparable to or lower than the economic damage avoided.

This is the same conclusion as the Stern Review; even in purely economic terms, it makes sense to sharply cut emissions.

How will the Howard Government react to the new report? It should welcome it as it eliminates the main reason the Government has given for refusing to take measures to cut Australia’s burgeoning emissions.

But it is more likely that it will attempt to ignore, reinterpret or dismiss the IPCC report. After all, the report undermines the Government’s criticisms of Labor’s target of 60% cuts by 2050. That now seems eminently achievable economically.

Clive Hamilton is the executive director of The Australia Institute and the author of Scorcher: The dirty politics of climate change, published by Black Inc last week.

CRIKEY: For the full final draft of the third installment in the IPCC report, click here.