News & Media Opinion Pieces The financial and human costs of ignoring climate change

The financial and human costs of ignoring climate change

Perhaps the most interesting admission of the year came from US Senator James Inhofe, a climate change denier, who has referred to climate change as the Third Reich’s Big Lie. He has compared the US Environmental Protection Authority to The Gestapo.

In a recent interview he said “I thought it (climate change) must be true until I found out what it cost.”

To some this seems an astonishing statement but not so to others who recognise that right wing conservative males feel threatened by the size of the problem and its effects on their power and wealth.

Be this as it may, cost has become a crucial issue and in Australia the Opposition frequently laments a carbon tax which it says will be imposed on everything including the cost of feeding the kitchen cat.

The UK Committee on Climate Change chaired by economist Lord Adair Turner has produced a report “Scope of carbon budgets – Statutory advice on inclusion of international aviation and shipping” which analyses the impact of including emissions from aviation and shipping in current targets and costs.

The analysis in the report reinforces other studies which suggest that the UK 2050 target of 80% reduction in emissions on 1990 levels can be achieved at a cost of 1-2% of GDP. This cost includes aviation and shipping. A cost of 1-2% GDP was previously accepted by Parliament when the Climate Change Act was first legislated, given the much higher costs and consequences from not acting to reduce emissions.

In the USA the supposed cost of addressing climate change was used by George Bush for refusing to sign the Kyoto Agreement and in 2009 Congress sank the cap and trade Bill on the same grounds.

In a Congressional Budget Office Report 2009 on reducing green house gas emissions the operative sentence is

“Reducing the risk of climate change would come at some cost to the economy. For example, the Congressional Budget Office (CBO) concludes that the cap-and trade provisions of the American Clean Energy and Security Act of 2009 (ACESA), if implemented, would reduce gross domestic product (GDP) below what it would otherwise have been—by roughly ¼ percent to ¾ percent in 2020 and by between 1 percent and 3½ percent in 2050”.

The need for action has to be balanced against the cost of not acting. The CBO felt that the costs of climate change were modest

“Many of the natural changes that are likely to result from climate change (such as more frequent storms, hurricanes, and floods) will affect agriculture, forestry, and fishing; the demand for energy; and the nation’s infrastructure. Despite the wide variety of projected impacts of climate change over the course of the 21st century, published estimates of the economic costs of direct impacts in the United States tend to be small.

Most of the economy involves activities that are not likely to be directly affected by changes in climate. Moreover, researchers generally expect the growth in the U.S. economy over the coming century to be concentrated in sectors—such as information technology and medical care—that are relatively insulated from climate effects.

Damages are therefore likely to be a smaller share of the future economy than
they would be if they occurred today”.

The cost of extreme weather events in the USA over the past two years are proving much greater than prediction and are probably responsible for a change in attitude to climate change. The infrastructure and medical costs are accelerating and there is increasing recognition of the costs required to prevent flooding.

What is the message for DEA members confronted with cost by politicians?

A report from the US Economists and Climate Change indicates the economists overwhelming accept the costs of delay are greater than the costs of action.

Reports from the UK government and the US Congress give costs of 1-3% of GDP to 2050.

The costs of delay in developing countries are accelerating due to extreme weather events as evidenced by insurance costs. In developing countries costs are not equated in dollars but in increasing famine and death.

It is reasonable to conclude that the block in action is political and the difficulty of facing the imposition of facing long term measures. Political inaction is partly due to pressure from the Corporate sector.

Read a more detailed discussion of the costs of climate change.

Stopping Climate Change is Much Cheaper Than You Think