The cost estimates vary widely. One recent study found that heating up to 2 degrees Celsius would require a total investment of between $ 4 trillion and $ 60 trillion, with an average estimate of $ 16 trillion, while heating up to 1.5 degrees Celsius between $ 10 trillion trillion and $ 100 trillion would cost, with an average estimate of $ 30 billion. (For reference, the entire world economy was about $ 88 billion in 2019.) Other studies have found that achieving net zero requires annual investments, ranging from less than 1.5 percent of global gross domestic product to as much as 4 percent. This is a lot, but within the range of historical energy investments in countries like the US
Let us now look at the cost of uncontrolled climate change, which will fall heaviest on the most vulnerable. These include damage to property and infrastructure due to rising sea levels and extreme weather, death and disease associated with natural disasters, pollution and infectious diseases, reduced agricultural yields and lost labor productivity due to rising temperatures, reduced water availability and increased energy costs, and species extinction and habitat destruction. Dr Hsiang, UC Berkeley’s economist, described it as ‘dead by a thousand cuts’.
As a result, climate damage is difficult to quantify. Moody’s Analytics estimates that even 2 degrees Celsius at 2100 will cost $ 69 billion dollars, and economists expect the toll to continue to rise with temperature. In a recent survey, economists estimated that the cost would be equal to 5 percent of global GDP at 3 degrees Celsius of warming (our trajectory according to current policy) and 10 percent for 5 degrees Celsius. Other research indicates that if current warming trends continue, global GDP per capita will fall by between 7 and 23 percent by the end of the century – an economic blow equivalent to multiple coronavirus pandemics. And some fear that these are big underestimations.
Studies already indicate that climate change has reduced incomes in the poorest countries by as much as 30 percent and reduced global agricultural productivity by 21 percent since 1961. Extreme weather conditions have also yielded a major bill. By 2020 in the United States alone, climate-related disasters such as hurricanes, droughts and wildfires caused nearly $ 100 billion in damage to businesses, property and infrastructure, compared to an average of $ 18 billion a year in the 1980s.
Given the sharp price of inactivity, many economists say it is better to tackle climate change. It’s like the old saying, ‘a grain of barley is worth a pound of cure. In this case, limiting warming will significantly reduce the future damage and inequality caused by climate change. It will also provide so-called fringe benefits, such as saving one million lives annually by reducing air pollution, and millions more by eating healthier, climate-friendly diets. Some studies even find that achieving the goals of the Paris Agreement can create jobs and increase global GDP. And of course, climate change will save many species and ecosystems on which humans depend – and on which many people believe they have their own innate value.
The challenge is that we now have to reduce emissions to avoid damage later, which will require major investments over the next few decades. And the longer we procrastinate, the more we will pay to achieve the Paris goals. A recent analysis found that achieving net zero in 2050 would cost the US almost twice as much as we wait until 2030 instead of acting now. But even if we miss the target of Paris, the economy is still a strong case for climate action, because every extra warming will cost us more – in dollars and in lives.
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Veronica Penney contribution made.
Illustrative photos by Esther Horvath, Max Whittaker, David Maurice Smith and Talia Herman for The New York Times; Esther Horvath / Alfred Wegener Institute