Economics Supports Immediate Action on Global Warming

Lately there seems to have been a shift away from climate science denial, toward arguments downplaying the costs of human-caused climate change.  Specifically, some economists publishing reports for Bjorn Lomborg’s Copenhagen Consensus Center have argued that we should focus our efforts more on adapting to climate impacts and on other issues, rather than on cutting carbon pollution and slowing global warming.

According to the Climate Action Tracker, current international climate policies will result in a global surface warming of about 4°C.  If we act on all conditional pledges, including those recently made by China and the USA, we’ll see about 3°C warming.  This (3–4°C) is the range of global warming that the Copenhagen Consensus Center claims would be the most optimal for the global economy.

One might ask, what sorts of climate impacts would we expect to see as a result of this much global warming?  Research indicates that the consequences would be quite severe.  For example, widespread coral mortality would occur, and 40–70% of global species would be at risk of extinction.  Glacier retreats would threaten water supplies in Central Asia and South America.  Sea level rise of 1 meter or more would be expected by 2100, with the possibility of destabilization of the Greenland and West Antarctic ice sheets, which would cause much more sea level rise and flooding of coastal communities.

How can we reconcile such serious climate impacts with the argument that they represent the most economically optimal scenario?  Part of the answer lies in dollar signs.  For example, economists only consider the value of the Great Barrier Reef in terms of its tourism and fishing dollar values.  If a species goes extinct, the cost is only measured in terms of its dollar value for human economies.

If we care only about economic costs, modeling suggests that the optimal pathway would involve further global warming of about 2°C, or close to 3°C above pre-industrial temperatures.  That’s higher than the international target of 2°C, but it also represents significant risks.  If a significant fraction of global species go extinct, will that really have such a minimal impact on our society?  And do we really value those species and overall biodiversity so little?

While economic strength is important, it’s not the only thing humans value.  It’s also not the only consideration in deciding how much global warming we can live with.  We have to consider all the risks from the resulting climate changes.  Climate modeling has uncertainties, and economic modeling has even bigger ones.  Climate uncertainty is not our friend; more uncertainty translates into more urgency to prevent the dangerous potential climate change consequences.

As glaciologist Lonnie Thompson famously said of climate change,

The only question is how much we will mitigate, adapt, and suffer.

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