Fighting Climate Change Could Cost 4% of Global GDP

The UN’s Intergovernmental Panel on Climate Change says that keeping global temperature in a safe range could cost the world 4% of its total economic output by 2030. According to the third installment of the UN’s biggest-ever study of climate change, holding the environment to a 2 degree Celsius rise would require a “40 percent to 70 percent reduction in heat-trapping gases by 2050 from 2010 levels.” It also will require huge shifts toward renewable energy sources and nuclear power. Perhaps mitigation costs should be included because the world political system seems unable to meet such objectives.

This is the third and final piece of the report that will be finalized in April, and that final report will be the basis for discussions on a global treaty in 2015. There are 190 nations that will be negotiating the deal, and the problem is that just 10 nations produced 70% of the emissions in 2010. That’s a bloc that will bargain hard against the common good as they are the ones that will have to change the most. In global negotiations, 10 can outlast 180 easily.

Climatologists believe that capping greenhouse gas concentrations at 480 parts per million would likely prevent a temperature increase beyond 2 degrees Celsius. Some models that peak at 530 ppm before declining also achieve that. Right now, the atmosphere is at 400 ppm, and the trend is going the wrong way. On average, emissions grew 2.2% for the period 2000-2010.

The cost of acting now is much less than the cost of acting later. Alex Morales at Bloomberg reported, “Containing the concentration to 480 ppm ‘would entail global consumption losses’ of 1 percent to 4 percent in 2030. That range would rise to 2 percent to 6 percent in 2050 and then to as much as 12 percent in 2100 when compared with scenarios that don’t involve fighting climate change, according to the document.” The current concentration is about 400 ppm.

Implicit in this study is the belief that it is too damned late to prevent the 2 degree increase, which comes on top of the 2.5 degree increase begun with industrialization. This journal agrees completely. Moreover, this journal believes that the temperature increase may have consequences that have yet to materialize regardless of what industry does. For example, the methane currently locked up in the Arctic permafrost may well escape because of the higher temperatures and further contribute to the greenhouse gas concentrations.

In addition, more violent weather is the inevitable result of heating of the earth; more energy in the system needs to be released as the atmospheric system seeks equilibrium. More hurricanes and more massive blizzards are bad for business. If a Hurricane Sandy strikes the eastern seaboard of the US once a century, that is bad. If it happens once a decade, it is vastly worse for the economy. If it happens annually, the current structure of that part of the world becomes unsustainable.

Not only must governments around the world spend money on reducing emissions, but also they must spend money to move people out of areas that flood easily. They must weather-proof their transportation systems and communications networks. Undeveloping land (returning housing developments to wetlands for instance) must be policy in some areas. Adapt or die never seemed so likely.