Monday, May 27, 2019

The Benefits of Climate Action Far Outweigh the Costs

Despite problems with existing economic models and resistance from political and business leaderships the logic of climate action is irrefutable. The merits of climate action is born out by a slew of studies and rudimentary math. 

When we factor the costs of environmental damage it is difficult to come up with an assessment that does not convincingly demonstrate the value of climate action over business as usual. Here are three separate assessments that come to the same fundamental conclusion.

In a 2018 Vox article David Roberts concludes, "these days, it has gotten almost impossible to make sustainability look like a bad deal." He points to the fact that as the cost of business as usual keep rising, the costs of sustainable alternatives keep declining.

Large potential reduction in economic damages under UN mitigation targets


In a 2018 Guardian article Damian Carrington says that climate action will save the world $30 trillion in damages which is far more than the costs of cutting carbon emissions. Citing an article published in Nature Carrington writes, "Data from the last 50 years shows clearly that when temperatures rise, GDP and other economic measures fall in most nations, due to impacts on factors including labour productivity, agricultural output and health."

"By the end of the century, we find the world will be about 3% wealthier if we actually achieve the 1.5C target relative to 2C target," said Marshall Burke, assistant professor at Stanford University in the US, who led the new work. "In dollar terms, this represents about $30tn in cumulative benefits...The estimated cost of meeting the 1.5C target is about $0.5tn over the next 30 years," he said: "So our evidence suggest the benefits of meeting the targets vastly outweigh the costs...We also calculated what’s going to be the additional economic cost if we hit 3C instead of 2C. This will cost the globe an additional 5-10% of GDP, relative to 2C; that is tens of trillions of dollars. These are very large numbers," Marshall said.

The actual costs are likely to be much higher as study did not include the costs of climate change that are hard to quantify.

Cambridge University’s Judge Business School


In a 2015 Think Progress article Joe Romm wrote that climate action avoids over $400 Trillion in damages. Romm was citing an analysis from Cambridge University’s Judge Business School. The author, Chris Hope, an expert on the economics of climate change, told Romm that the "corresponding value for a low emissions scenario is about $80 trillion." The cost of melting permafrost alone represents $43 trillion in damages. "So climate action remains a figurative no brainer," Romm said "and climate inaction remains a literal no-brainer."

Although it may seem obvious, straight forward math is confounded by disinformation from those with dirty energy agendas and misinformation from short term thinkers. However, even those with tiny time horizons will find that there are short and medium term savings that come with climate action.

New Climate Economy Report


Roberts said a global shift to sustainability would save us $26 trillion by 2030. He cites the 2018 New Climate Economy Report that says, "We can have growth that is strong, sustainable, balanced, and inclusive." The report looked at energy, cities, food/land use, water, and industry/innovation/transportation and indicated that almost $90 trillion will be invested in infrastructure in the next decade.

"[S]hifting to sustainable technologies and techniques would save trillions of dollars through 2030 in increased productivity, innovation, and reduced health costs. Sustainability costs less," Roberts wrote about the report. "Policymakers worldwide need to price carbon, roll back fossil fuel subsidies (and other policies that impede sustainability), invest in sustainable infrastructure, harness the private sector, and protect vulnerable communities." 

The report also indicates that current models and projections underplay the benefits of transitioning to a sustainable low carbon economy. "Current economic models are deeply inadequate in capturing the opportunities of such a transformational shift, or the grave dangers of climate inaction," the report states. "We need a new class of economic models that can capture the powerful dynamics at play, including transformative technological advances, preservation of essential natural capital, and the full health benefits of cleaner air and a safer climate, including the containment of pandemic diseases."

We have the required solutions but we need the will to enact policy to scale them up.  In addition to problems with our economic models we are also contending with a failure of leadership. "The barrier — now, as always... is sufficient political and business leadership," the report said.


Related
Economic Assessments Overwhelmingly Support Climate Action
Economic Arguments as a Pretext to Torpedo Climate Action
Does Business Need Government to Incentivize the Green Economy?
The Energy Efficiency Opportunity and the Case for Government Leadership
Climate Crisis Economics: A Serious Threat and a Real Opportunity
We Cannot Afford to Deny the Cost of Climate Change

No comments: