You would think that ensuring the survival of the human race is something you can’t put a price on, but one of the reasons that governments aren’t always keen to take action on climate change is the economic costs of doing so.
But new research investigating the future costs of dealing with a warming planet shows just how counterintuitive that way of thinking actually is, because the longer we wait to take action, the more we’re going to have to pay in the long run.
According to the study’s calculations, the cheapest option at this point is to pay what it takes to limit the global temperature rise over the next century to 2 degrees Celsius – the same number that governments committed to with the Paris Agreement.
“To secure economic welfare for all people in these times of global warming, we need to balance the costs of climate change damages and those of climate change mitigation,” says climate scientist Anders Levermann from the Potsdam Institute for Climate Impact Research (PIK) in Germany.
“Now our team have found what we should aim for.”
To reach their figures, Levermann and his colleagues used the Dynamic Integrated Climate-Economy (DICE) computer simulation developed by the Nobel Laureate of Economics William Nordhaus, specifically built to look at the impacts of climate change.
The DICE model weighed up the costs of cutting greenhouse gas emissions (through a reduction in the use of coal) against the costs of further climate change – increasing weather extremes, reduced human labour capacity, and so on.
An earlier study from 2015 was used as a guide to how temperature and global gross domestic product (GDP) are connected, with climate change damage starting at zero from 2020 and projected all the way to 2100.
There are a lot of variables to consider – how consumption patterns might alter, the impact climate change might have on conflicts around the world, the effects of various tipping points that we haven’t calculated for yet – but economically speaking, stopping warming at 2 degrees Celsius is our cheapest option.
“It is remarkable how robustly reasonable the temperature limit of more or less 2 degrees C is, standing out in almost all the cost-curves we’ve produced,” says climate scientist Sven Willner from PIK.
The researchers say “fast and fundamental global action” is required to put a lid on rising temperatures around the globe, based on the best data we have so far. Putting action off to a future date is only going to become more and more costly.
Let’s hope that the start of 2020 marks a real watershed in the world’s attitude towards our climate crisis – with signs of gathering momentum now appearing – and that we can keep global warming down to 2 degrees Celsius or as close to it as possible. Economically or otherwise, it’s the only option that makes sense.
“The world is running out of excuses to justify sitting back and doing nothing,” says Levermann. “All those who have been saying that climate stabilisation would be nice but is too costly can see now that it is really unmitigated global warming that is too expensive.”
“Business as usual is clearly not a viable economic option any more. We either decarbonise our economies or we let global warming fire up costs for businesses and societies worldwide.”