This page in brief
We have seen that there are many good reasons to take action to limit global warming. But will it cost too much?
On this page, I summarise the latest data on costs, which show that it will be far more costly to do nothing. Action is very cost-beneficial. (I give references to the information behind this conclusion, on my page The cost of climate action.)
1. Not as costly as you think
You might think, judging by the way some people talk, that addressing climate change would destroy the capitalist system and send us all back to subsistence living. But it isn’t true.
Assuming we start with the most cost effective measures (some of which will actually save money rather than cost money), the cost of addressing climate change this century will likely be in the range of 1-5% of global GDP, with lower costs early on and greater costs later.
Combatting climate change won’t cost the earth. (For more information, see Cost estimates.)
2. Act now or pay more later
The longer the world community takes to get greenhouse gas reduction on target, the more severe the action will need to be. That will cost more, and increase the risks of permanent damage.
3. Additional benefits
Acting on climate change to keep global temperature rise to less than 2 degrees is projected to have other benefits.
- Health benefits (e.g. from reducing air pollution) are estimated to be more valuable than the costs.
- Climate action will lead to the building of new infrastructure that is also more capable of withstanding natural disasters that are not caused by climate change, with a significant financial benefit.
- The world’s ecosystems provide enormous financial benefits that are not always accounted for. These assets are at risk from climate change, and taking effective action will thus provide significant financial benefits.
4. Do nothing, pay more
It is doubly difficult to estimate the costs of not addressing climate change to the end of this century because of the difficulty of extrapolating the scientific models and the difficulty of estimate costs that far into the future.
But the many studies agree that continuing to burn carbon so that the concentration of greenhouse gases in the atmosphere keeps increasing and global temperature rise by 4 degrees or more by the end of the century will have costs somewhere between 1 and 4 times the costs of taking action.
When the indirect costs noted above and the harm caused to people and animals are included, it is clear that not taking action isn’t a sensible option. (For more information, see Doing nothing is not an option.
5. Fossil fuels are heavily subsidised
Government subsidies for fossil fuels amount to a staggering $5.2 trillion, 6.5% of GDP and eliminating these subsidies would make available an amount equivalent to 1.7% of GDP. (I don’t understand why these two percentages are so different.) These subsidies include both direct government subsidies, and the costs of pollution, climate change and other environmental & health impacts which fossil fuel companies don’t pay. (For more information, see Subsidies.)
6. Renewable energy is competitive
Around the world, the cost of generating electricity from renewable sources has been dropping fast. From now on, in most cases, it will be cheaper and less risky to use wind, solar, hydropower and/or other renewable sources than to build expensive coal-generation power stations. If direct and indirect subsidies are removed, coal generation becomes even less viable. (For more information, see Costs of electricity generation.)
The bottom line
The world stands to gain by climate action, and action is feasible and cost-beneficial. However it appears that a few rich people and large companies stand to lose. As will be seen in my final post on climate change, they are fighting to protect their interests, and influencing voters and governments to delay action as long as they can.
Photo: Pixabay on Pexels.