Tuesday, July 29, 2014

Delaying Climate Policies Could Cost U.S. Economy $150 Billion Each Year, White House Warns

This March 13, 2014 file photo shows cracks in the dry bed of the Stevens Creek Reservoir in Cupertino, Calif. (Credit: AP, Marcio Jose Sanchez) Click to enlarge.
The White House’s Council of Economic Advisors (CEA) released a sweeping report Tuesday on the monetary costs of delaying action on climate change, and it had one glaring conclusion:  the longer America waits to act, the more money will be stripped from the U.S. economy.

The report, titled The Cost of Delaying Action to Stem Climate Change, looks at climate change policy as a form of insurance — that is, a form of self-protection against various forms of risk.  As with insurance, the report found that paying money over time to mitigate the risks of sea level rise, severe weather, drought, and other potential impacts of global warming would be far less expensive if done sooner rather than paying for the aftereffects later, and absolutely less expensive than waiting to deal with more catastrophic climate-related events.

“At this stage, there’s no doubt that climate change is real, that it’s being caused by our activity, that it’s harming the planet and affecting our livelihood,” Council of Economic Advisers chairman Jason Furman told reporters on a press call on Monday.  “What this report makes clear is first of all that we know way more than enough to justify acting today; second, that delaying action will increase the cost; and third, the uncertainty of the risk … [is] an argument for acting more today as a form of insurance against the worst consequences in the future.”

The thesis for the CEA’s report is this:  if policies aren’t implemented to curb the amount of carbon emitted into the atmosphere, carbon will continue accumulating.  As more carbon accumulates, temperatures will rise, increasing the negative impacts of climate change, and thereby increasing economic costs over time.

As the net mitigation costs of dealing with climate change increase, the report found that on average, costs would increase 40 percent for every decade of delay on climate policies.  That percentage is based on present value, meaning the total amount the United States would have to pay would be 40 percent larger than it would be today.

Delaying Climate Policies Could Cost U.S. Economy $150 Billion Each Year, White House Warns

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