How Much Will It Cost to Address Climate Change? Pennies Compared to the Alternative

By Thomas Neuburger. Originally published at DownWithTryanny!

Economic growth and global warming, Figure 1 from a paper studying “Global non­linear effect of temperature on economic production” (link below). “Non-linear” in this case means “at what warming point do economies tend to ‘fall off a cliff'”? It’s not the same point for all economies, but the non-linearity is obvious. (For conversion in charts a, b, and c, 20°C = 68°F, and 30°C = 86°F. Click to enlarge.)

The cost of addressing climate change is much in the news these days, thanks to the Ocasio-Cortez Green New Deal (GND) proposal. Everyone seems to want to know how much it will cost. Too much, according to the editors at Forbes. “The Green New Deal Would Cost a Lot of Green,” they warn us, and the editors at Bloomberg want us to know that “The Green New Deal Is Unaffordable.”

These headlines tell you they measure cost in terms of lost profit, not lost wages, since no one at Forbes or Bloomberg wants to see wages rise. Nor do they consider lost lives.

Green New Deal advocates assure us that indeed we can pay for it, partly because of increased productivity (it will put a lot of people to work, FDR-style) and partly because the economy can simply absorb the influx of new money without the need for high “pay for it” taxes, just as the economy is absorbing the multi-trillion cost of the Iraq War and President Trump’s tax cuts. When elites and the wealth they serve want something expensive, they get it, and no one bothers to make them “pay for it” later.
See this Huffington Post article, “We Can Pay For A Green New Deal,” by Stephanie Kelton, Andres Bernal and Greg Carlock for the gist of the “yes, it’s affordable” argument.

Both statements are true, of course. Any attempt to really mitigate climate change — make the damage less, as opposed to merely adapting to the crisis — will cost “a lot of green.” And yes, the economy can absorb the additional spending, allowing taxes to be used only as an economic cooling device (if and as needed), not as a prohibitory “pay for it” device.

Measuring the Wrong Variable

But few are focusing on the real measurable — not what it will cost economically to address the problem, but what it will cost economically to not address the problem. “Cost economically” here means exactly and only what the people at Forbes and Bloomberg think it means — How does economic activity slow when atmospheric temperature rises? How are profits and wealth affected? This analysis looks at no other factors affecting the economy, such as the cost of recovery from super-storms.

One of those who did address the economic cost of not dealing with climate change is Solomon Hsiang, professor of public policy at UC Berkeley and coauthor of a little-noticed 2015 paper, “Global non­linear effect of temperature on economic production.” A link to the Nature abstract is here; a link to the paper itself is here (pdf).

The abstract begins this way (notes are linked in the original):

Growing evidence demonstrates that climatic conditions can have a profound impact on the functioning of modern human societies (1,2), but effects on economic activity appear inconsistent. Fundamental productive elements of modern economies, such as workers and crops, exhibit highly non-linear [jerky or stepwise] responses to local temperature even in wealthy countries (3,4). In contrast, aggregate macroeconomic productivity of entire wealthy countries [aggregate economic activity of whole nations] is reported not to respond to temperature (5), while poor countries respond only linearly (5,6). Resolving this conflict between micro [i.e. labor] and macro [nationwide] observations is critical to understanding the role of wealth in coupled human–natural systems (7,8) and to anticipating the global impact of climate change (9,10).

The language of the abstract is a little confusing for a lay reader, so let me explain. In essence, the question they’re studying is this: Are macroeconomies (economies of whole nations) affected by atmospheric warming, contrary to what is reported? If so, are those effects linear (gradual and along a straight line) or non-linear (sudden and precipitous at certain thresholds)?

In other words, do national economies “drop off a cliff” at certain levels of increased atmospheric heating? The graph at the top, taken from the paper, shows the answer is yes.

The authors conclude (my emphasis):

We show that overall economic productivity is non-linear in temperature for all countries, with productivity peaking at an annual average temperature of 13 °C [56°F] and declining strongly at higher temperatures. The relationship is globally generalizable, unchanged since 1960, and apparent for agricultural and non-agricultural activity in both rich and poor countries.

Note that this is a study of the past, not the future. In other words, the study looked at real-world consequences of warming that has already occurred, not projected consequences using economic models only. Thus this forward-looking conclusion: “If future adaptation mimics past adaptation, unmitigated warming is expected to reshape the global economy by reducing average global incomes roughly 23% by 2100 and widening global income inequality, relative to scenarios without climate change.”

Widening global wealth inequality means that some nations will do better than others — at first. An article covering a subsequent talk by Dr. Hsiang put it this way:

That decrease in economic output will hit the poorest 60 percent of the population disproportionately hard, said Hsiang. In doing so, it will surely exacerbate inequality, as many rich regions of the world that have lower average annual temperatures, such as northern Europe, benefit from the changes. Hotter areas around the tropics, including large parts of south Asia and Africa, already tend to be poorer and will suffer.

A graph printed with the article indicates the eastern seaboard of the United States and northern Europe, among other places, will have improved economies (click through to see it).

But the conclusion that the East Coast and northern Europe will thrive economically is deceptive, since the study was limited to the economic effects of warming. What about the physical effects? For example, the population of the East Coast of the U.S. will at some point suffer numerous super-storms, sea level rise and the shoreline erosion that always accompanies it.

Put simply, at some point cities on both coasts will have to be moved inland as the land they sit on erodes into the ocean. How far inland? I wouldn’t want to be the planner that has to figure that out, since you only want to have to do it once.

The East Coast is home to about 120 million people. The total U.S. population is between 300–350 million people. More than a third of all U.S. citizens will be forced to relocate away from the Atlantic shore. What’s the cost of that?

As to northern Europe, if the thermohaline current (the Gulf Stream) is drastically altered by fresh water melt from Greenland, northern Europe — England, for example — will freeze like Canada in the winter, whose latitude it shares. Will England thrive economically in that scenario?

How Much Will It Cost Not to Mitigate Climate Change? $17 Trillion Per Year in Economic Loss Alone

So what’s the economic cost of not responding to global warming? According to the paper, the bottom line is this. Global GDP (called Global World Product, or GWP) was estimated between $70 and $80 trillion about five years ago. Thus, by this paper’s (highly conservative) estimates, the economic loss that results from willfully ignoring climate change will be roughly $17 trillion per year by 2100, a sum that doesn’t include the additional cost of wars, famines, droughts, plagues, epidemics, and “national emergencies” of various flavors and stripes.

Can we afford, economically, not to address climate change now? The answer, of course, is no.

Yet once more the pathological among us have us asking the wrong questions. All they want to know is, will their own wealth be affected? Will they still keep their billions? Will they die poorer than they are today?

The question we should be asking is, will the rest of us die poorer — and sooner — if our first priority is protecting the wealth of the wealthy?

The answer, of course, is yes.

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  1. Synoia

    Again misding critical infrastructure at or close to sea level,which will miltiply the drbastation caused by global warming’s sea level rise:

    Sewage plants.

    For example, in Huntington Beach CA if the Sewage Plant is flooded, a few thousand homes may be flooded, but one million homes up to 30 miles inland, will become uninhabitable.

    This scenario is repeated for all coastal sewage plants in the US, about 200 of them.

  2. Synoia

    Again misding critical infrastructure at or close to sea level,which will miltiply the drbastation caused by global warming’s sea level rise:

    Sewage plants.

    For example, in Huntington Beach CA if the Sewage Plant is flooded, a few thousand homes may be flooded, but one million homes up to 30 miles inland, will become uninhabitable.

    This scenario is repeated for all coastal sewage plants in the US, about 200 of them.

    1. PlutoniumKun

      Yes – its hard to exaggerate just how expensive moving a city is. The reason why ‘new cities’ are so rare, and so rarely succeed, is that its more than just building new apartments and offices. The real cost is the base infrastructure, which has to be in place before you move. Every city has a legacy of decades or centuries of sunk cost investment.

      1. The Rev Kev

        Fully agree with your comment. I can imagine that those ‘centuries of sunk cost investment’ may turn out to be literally true. Just wait until it has to be decided, with scarce resources, which areas can be saved and which areas have to be let go. Which is worth more? New York City or southern Florida? Are we going to see cofferdam cities and towns? How about we build hundreds of thousands of houseboats. Don’t laugh – there are people in places like Asia that live their lives on small boats. They can’t be flooded and as more coastline is lost, they can move inland to the next coastline. Maybe they can go up river to get far inland and they could live on the rivers themselves like you see in England’s canals with their canal boats.

      2. Left in Wisconsin

        Indeed. Which is why statements like the following don’t help the author’s cause:
        The East Coast is home to about 120 million people. The total U.S. population is between 300–350 million people. More than a third of all U.S. citizens will be forced to relocate away from the Atlantic shore. What’s the cost of that?

        This completely ludicrous figure is apparently the total population of all states with any Atlantic shoreline.

    2. Linden S.

      +1 +1

      Increase in “clear-sky” flooding of near-coast buildings/infrastructure is one of those “already here” things. I feel like a coming oh-sh*t moment is when the first sea-level-rise enhanced hurricane storm surge hits Miami. † Of course, Miami might become uninhabitable because of saltwater intrusion and unworkable septic before that happens.

  3. drugstoreblonde

    I keep thinking of the video that came out recently showing Senator Feinstein being confronted by a group of school children about the GND and her (in)action on the climate front. It was like if the Children’s Crusade had confronted the Cryptkeeper from Tales from the Crypt before being sold off at market.

    The children were right: whatever mess we are actively creating or passively letting be created will be their inheritance. I’m happy to see that the costs can be put into perspective and be shown to be trifles when compared against the countless losses and costs we are sure to incur. Still. I don’t think the battle for GND is a matter of showing the unbelieving and unconvinced the figures and numbers. I had assumed that nearly a decade of yearly forest fires, droughts, water and food insecurity, war, etc, would be enough to stir the imagination. Now I’m worried what sort of disaster, what sort of breakdown it will take to bring the Cryptkeepers back onto the side of life–and just how late it will be by then.

    1. Isotope_C14

      My suspicion is that one of two things is true.

      1.) The 0.0001% are truly delusional and absolutely powerless to understand any problem that contains a solution that says that “free markets” have to be eliminated. Advanced-techno-communalism ala Peter Joseph is something utterly incomprehensible to them.

      2.) They, as the crypt-keeper says, knows exactly what she/they are doing. It is not-implausible that the 0.0001% have a technological solution already in-place. What isn’t being said, is that they are going to eliminate large swaths of the global population prior to implementation. I suspect they would like to halve, or more the global population. Seeing as these crypt-keepers tend to be quite the racist bunch, that their plan is to get rid of anyone darker than a cappuccino. A fine plan for that would be render India, parts of China, and most of the global south inhospitable. Perhaps they also realize, that they need to take arable land. Russia is well suited for that, hence the “Russians” are the problem.

      FWIW – I don’t think the crypt-keepers are ever on the side of life. They vote eternal war. They vote for a death-penalty medical industry, They vote to poison the food with endocrine disruptors. They vote to exterminate animals all over the planet.

      Feinstein’s honesty is just proof of how brazen and soul-less they are.

      1. drugstoreblonde

        I wish I could believe that there were a technological “fix” that the galaxy-brained elite have in place beyond “compound in remote corner of New Zealand”. It’s ironic that the generation most responsible for exacerbating climate change, ushering in a new era of neoliberalism (if not outright fascism), and leaving what were once some of the most robust social democracies in a terminal state, grew up under chronic threat of nuclear destruction. The idea of the world ending, due to humans, isn’t foreign to them. Did the air siren drills they endured in their childhood actually turn them into a death cult? Do they actually feel some jouissance imagining the world ending with them?

        I’m straying a bit from topic here, but I’ve asked my parents (born ’54 and ’58 respectively) about why they are so unconcerned about climate change, and it really boils down to not feeling like they’ll be inconvenienced by it in any way. This despite their living in Salt Lake City, Utah, in an arid climate already steeped in a decades-long drought. Maybe they fear it more than they let on. Maybe if they show their fear, the one wealth instrument that they and most other boomers seem to be relying on (their homes) will evaporate like their 401Ks they never really built up (which in truth were always a mirage) and their pensions they never really had. I guess, in a way, my parents, in particular, and the baby boomers, in general, are reverse-mortgaging the planet. Satisfied with extracting whatever they can from the world as it is than leaving anything of value to those yet to come.

        1. coboarts

          I split the difference with your parents, born in ’56. As you go through your list of the evil things our generation did, all of our complicity and shortsightedness, you miss the fact that anyone part of that generation not swept up in the ongoing rush became aware from the outset, with the view sharpened over the years, that we are being privileged to a total mindf**k. I had a front row seat to the entire 70’s environmental/peak oil thing (when real work actually did get done). I read “Limits to Growth” in 1973, my senior year in high school. I also had a front row seat to the way the environmental movement was pirated away from doing any more real work. I recently attended the Global Climate Action Summit in San Francisco, my worst concerns were evident in spades. I’ve personally seen too much to jump on any bandwagon, in full knowledge that the climate has been changing since growing up in SoCal.

          And about my (your) generation. Generations are made of people. People haven’t evolved. When you talk to a boomer nowdays, every one of them was a hippie. In fact, there were very few real hippies, and a fringe of camp granolas. I never claimed to be a hippie, but I’ve lived as close to the earth and life as I could and not run away from it all. I guarantee that the changing climate is being used against your (our) real, best interests. We’re in a fight, you’d better believe it. But, your opponent is way ahead of the game and knows how to create and direct complex stories. Don’t believe in anything, especially those things that seem to gain momentum fast. Don’t get caught up in the crowd – any crowd.

          Hype ’em up, get ’em scared, and take ’em for the ride.

          1. TimR

            Can’t tell what you actually believe… Though I agree with your wariness of hype and mass manipulation…

      2. notabanker

        100% real-life conversation with my 18 yo college student last night:
        Me: I’ve been reading a lot about climate change and it’s not good
        Son: My generations problem.
        Me: Huh?
        Son: My generation will have to deal with it, it’s our problem.
        Son: I have a friend who thinks in 15-20 years we will all be eating raw bugs for protein because we will export all of the meat to China and India.
        (Insert long discussion about chaotic systems and our inability to predict exactly how the future will unfold and how it plays out country by country is really unknown)
        Son: Yeah but it comes down to military strength. When you have military power over the people you do what you want.
        Me: Yeah, but global war solves nothing, with nukes everyone is dead.
        Son: Dad, No superpower wants to fight another superpower. Instead they will destroy the countries that aren’t important to them. Like they did in Vietnam, or Afghanistan. They already do it for oil, they’ll do it for food. But hey, I’m not a politician.
        Me: Maybe you should be.
        Son: (Laughs) And have every second of your life examined? No thanks. Besides, every decision a politician makes is a bad one. You can’t be a ‘good’ politician.

        Fast forward an hour later:
        Me: What did you study in History today?
        Son: The French Revolution

        1. JBird4049

          What worries me is not anyone actively trying to destroy a country, or the Earth by mistake, but having conflicts spiral beyond anyone’s control. Have Pakistan and India or India and China have a failure to communicate and goodbye to them. It is too easy for a country to panic and to launch a few dozen missiles.

    2. Oh

      Senator Feinstein has been in the Senate for 30 years and she recently got re-elected by a “wide” margin. She knows everything and has her own ideas. The children are wrong. /s

  4. oaf

    A big question is: How to do adequate climate-change mitigation …on the backs of those most unable to fund it,
    …while maintaining the most powerful climate-altering military structure on the planet???
    Can’t deal with one without major effect on the other…

    Maybe, get rid of few billion non-essential people???

    U.S. has to come out a Winner!. Go Team!!!

    Free S.E.R.E. training should be a right of all United Statesians. We are going to need those skill sets as the game winds down. Donald? if we cant have a tax cut, can you give us something we can use???

  5. Tom Doak

    Slightly OT, but the graphic of the cost of the Iraq War is misleading. Why show the costs “with interest through 2053” if the article is arguing that we don’t have to pay for the interest? The $1.6 trillion plus future disability benefits should be enough to make the point, we don’t have to treat it like Congress treats USPS pensions.

  6. Brooklin Bridge

    Forbes, Wall St., the global empire of profit: The more one thinks about the total lack of self awareness or conscience in the basic wrongness of those priorities, the more frighteningly grim the future looks.

    1. Brooklin Bridge

      Adding that there seems to be an impression that there will be some sort of rational response, some overall thoughtfulness or organization to events such as the complete and relatively sudden loss of entire coastal cities as habitable. Some sense of priority with a view to the collective benefit of the whole. Rather I think there will be a movement away from our current organizational priorities (which largely amounts to: profit potential of catastrophe combined with assistance to the well off but at least has some organizing principle of rationale to it) to one of sauve qui peut, irrational, non collective response (or non response) as catastrophes become more wide spread and more profound. Just looking at how we dealt with New Orleans, Houston, and Puerto Rico, to name a few; it’s not as if our starting point is particularly reassuring.

      1. coboarts

        “sauve qui peut” as that’s said, the line breaks and the slaughter begins. Up until that point, there was still a fighting chance. It’s the size of the fight in the dog.

  7. Carla

    “But few are focusing on the real measurable — not what it will cost economically to address the problem, but what it will cost economically to not address the problem.”

    I have to say, this is exactly the problem we have with expanded, improved Medicare for All.

    Ignoring the real measurable — I will remember that phrase. As we fight for a livable planet and a country we actually want to live in, that’s a concept we’re going to have to trot out often. God knows, we can’t count on the “economists” to do so.

  8. Very

    It feels like this cost debate is besides the point.

    Are there any solutions to our problem at all?
    That should be the first question.

    Personally I doubt anything we could do will have any measurable effect at all.
    We want to keep our toys and luxuries. As long as we are not ready to reduce, its all theater.

    1. Brooklin Bridge

      I think there are solutions of sorts, but the issue of time between recognizing the problems and getting to the point where we can effectively deal with them in our capacity as technologically advanced societies is a major issue if not the major issue.

      Speaking only in terms of the US, and only simplistically to convey the ideas, but the implication being a global shift, there may be hope for a real response if within the next ten years we fill our Senate and House and Executive branch with AOCs, and Sanders(s) and Gabbards, and Elizabeth Warrens and have only the stray Pelosi(s), Feinsteins or Shumers. Basically, the mirror opposite of what we have now. And that would largely be just to recognize beyond small somewhat isolated groups that WE HAVE AN EXISTENTIAL PROBLEM. Then, we might hope for solutions starting from the collective power of the state and leveraging our industrial and technological capacities as nations.

      If not, if there is no global, “Have you no shame?” transitional moment (perhaps ten years is unrealistically short), it gets more and more likely that survival will at best be local affairs, luck of the draw, assuming we escape things like nuclear wars started by the egos of buffoons and maniacs, and even then it may not be enough for the species to survive because the problems are only going to get worse for generations to come.

      It seems fair to wonder that as evolution of a species becomes complex AND invasive, at some point it reaches corresponding points of likely or even inevitable collapse.

      1. Brooklin Bridge

        Should have started off the third paragraph with, “How likely is that?” which is the crux of the “time” problem I was trying to get at.

    2. Ignacio

      You can keep asking your first question as long as you want… meanwhile earth rolls on and decarbonization proceeds.

  9. rjs

    has anyone attempted to account for the front loading of carbon emissions that would come with such an intense economic restructuring? take just the steel you’ll need for windmills and high speed rail, and the aluminum you’ll need for solar panels and wind, and the quantity of both of those metals that you’ll need to rebuild the grid….major steel mills and aluminum smelters both consume the amount of electric energy of a small city….but before you even get to the foundries and smelters, the iron ore and bauxite must be mined, refined, and transported….those large pieces of earth moving equipment typically use around 10 times the diesel fuel that a highway dump truck uses….then the ore must be transported from countries like Brazil across the ocean in ships running on highly polluting bunker fuel…just based on the green new deal’s likely consumption of those two metals alone, it seems likely that the carbon footprint of this plan over the time frame of the next couple decades will be greater than doing nothing at all…

    1. PlutoniumKun

      Surely what matters is not the carbon emissions from building wind turbines or electric car, but the net carbon used in building wind turbines instead of coal/gas fired plant or electric cars instead of diesel ones or high speed rail instead of more roads.

      Clearly, if you decided to accelerate the normal 20-25 year investment cycle in power infrastructure down to (for example) 10 years, then there would be a short term increased impact (unless of course you diverted the investment from something else, such as building F-35’s and aircraft carriers), but in the overall global carbon cycle, that’s not likely to be all that significant if over a couple of decades you displace sufficient fossil fuel plant to ensure a significant net drop in emissions.

    2. Jack Lifton

      You left something out.After we produce the steel, aluminum, copper, and rare earths to accomplish the change we will, by shutting down base load, never again be able to produce those metals, or any nickel, cobalt, or manganese. Nor will we be able to recycle any of those metals. The industrial age will then collapse due to a lack of raw materials.

    3. Ignacio

      That calculation should be dynamic. Would depend on how industries and raw materials shift to non fossil fuel energy. But be sure that is nothing out of current scale. If one just thinks on the amounts of sands required for construction…….

  10. Andrew Thomas

    It is probably hopeless. But I have 2 infant grandchildren, with 2 more on the way. So, this is not something I can tell my kids. If the problem is “money” (MMT aside) how about scotching the $1trillion for our nuclear armament reboot? Not a word from ANYONE in MSM or Congress about this lunacy. How about reinstating the nuke treaties we have torn up and thrown away just since 2000? The growing possibility of WW 3 has reached levels that should keep us up at night. The US attempted coup in Venezuela, the NATO surrounding of the Russian Federation, the ongoing “pivot”to China, naval provocations by the US and (absurdly) the UK in the South China Sea, Ukraine madness, now India/Pakistan, the headed-for-nowhere talks with North Korea ( if Kim agrees to give up his nuclear “deterrent “, such as it is, he’s completely nuts), Iran, where the man who spearheaded the nuclear deal has just resigned, the hardliners who were screaming that you cannot trust the US having been proved 100% correct. This is the Cuban Missle Crisis at the very least, and the adults in the room in the one place that nuclear war remains a publicly stated option are Trump, Bolton and Pompeo. And the media and the Congress are utterly oblivious or saying things that worsen our odds. The point is that we are facing 2 existential crises, and by addressing the first- the possibility of nuclear annihilation- we will have the cash to address the second- climate catastrophe- with the urgency it should have been addressed 30 years ago. It may well not be enough to save us. But we have to stop our mad rush toward Armageddon. And NOW.

    1. Brooklin Bridge

      Well stated. It’s the, “And NOW,” part that’s sobering. It seems beyond unlikely even assuming we could get past the “if it exists” and “how serious is it really” problems (on which progress is real but slower than many realize and apparently up against utterly insane and pathological but powerful opposing forces).

  11. Unfettered Fire

    The GND would be more effective if we decoupled social services investment from energy upgrades. The urge to speed the process regarding healthcare and education improvements is without question but to fast track “smart grid” technology as mentioned on page 7, Section (D) in the GND proposal is calling for a dangerous swap of fossil fuel pollution for a national (global) blanket of lethal electro smog, not to mention an obscene invasion of privacy.

    “The greatest polluting element in the earth’s environment is the proliferation of electromagnetic fields. I consider that to be a far greater threat on a global scale than warming, or the increase of chemical elements in the environment.”

    ― Robert O. Becker, M.D.

    Trump has recently tweeted to “step up” the deployment of 5G, which has already begun installation in 30 cities without our consent. Why the rush? We need a national discussion about what the Internet of Things would entail. Are we willing to forfeit our freedom, live in a social credit system ala China so that our refrigerator can listen to our kitchen conversations and sell that data? Surveillance capitalism is here. Data is the new oil.

    It’s a dirty trade-off, all around.

    In Marc Ellsberg’s dystopian novel, Blackout, we explore the vulnerability of a 5G world so interconnected that a simple hack could bring the entire world to a halt. Energy is like currency, it’s works best decentralized.

    “They define wireless radiation as a pollutant when it comes to protecting themselves in terms of liability, but when they want to force it into our communities and blanket our communities, supposedly it’s safe.”

    “The technotronic era involves the gradual appearance of a more controlled society. Such a society would be dominated by an elite, unrestrained by traditional values. Soon it will be possible to assert almost continuous surveillance over every citizen and maintain up-to-date complete files containing even the most personal information about the citizen. These files will be subject to instantaneous retrieval by the authorities.”
    ~ Zbigniew Brzezinski’s book, Between Two Ages, 1970

    1. TimR

      Something like this is a much more plausible dystopian nightmare than global warming in my view. Climate change has actually been well propagandized… suggesting to me it’s more about priming public opinion to accept some massive social restructuring.

  12. MSimon

    The Climate Change I worry about is Central Illinois under 2 miles of ice. Harvesting crops will be difficult. Planting them may also present challenges.

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