Axios: What’s the Actual Cost of Not Addressing Climate Change?

Yves here. To put the cost of Sanders’ Green New Deal plan in context, it’s roughly what we spend on the US military when you throw in all the black budgets. Yet we somehow can’t afford to save the climate, particularly, as the article points out, the “cost” pays for itself?

But sadly, as some readers pointed out at the Bailey Island meetup, the climate scientists they know all say it’s too late. All we can do now is arrest further damage and work on mitigation of the impact.

By Thomas Neuburger. Originally published at DownWithTryanny!

The amount of carbon tax — a neoliberal solution — required to achieve just a modest reduction in U.S. greenhouse gas emissions by 2030 (source). Bernie Sanders wants to reach 100 percent renewableenergy for electricity and transportation by no later than 2030 and complete decarbonization no later than 2050. One of those two ideas just might solve the problem, and the other has not a prayer of working.

Every report on the release of Bernie Sanders’ Green New Deal plancontains at least one quote in which someone is shocked, dismayed or dismissive about the cost — $16 trillion in total — even though the plan will, as the proposal itself says, “pay for itself” in a number of ways:

  • This plan will pay for itself over 15 years. Experts have scored the plan and its economic effects. We will pay for the massive investment we need to reverse the climate crisis by:
  • Making the fossil fuel industry pay for their pollution, through litigation, fees, and taxes, and eliminating federal fossil fuel subsidies.
  • Generating revenue from the wholesale of energy produced by the regional Power Marketing Authorities. Revenues will be collected from 2023-2035, and after 2035 electricity will be virtually free, aside from operations and maintenance costs.
  • Scaling back military spending on maintaining global oil dependence.
  • Collecting new income tax revenue from the 20 million new jobs created by the plan.
  • Reduced need for federal and state safety net spending due to the creation of millions of good-paying, unionized jobs.
  • Making the wealthy and large corporations pay their fair share.

The proposal goes on to note (emphasis mine):

The cost of inaction is unacceptable. Economists estimate that if we do not take action, we will lose $34.5 trillion in economic activity by the end of the century. And the benefits are enormous: by taking bold and decisive action, we will save $2.9 trillion over 10 years, $21 trillion over 30 years, and $70.4 trillion over 80 years.

When it comes to number this big, the mind shuts down. Spending $16 to save $34 is easily understood. Spending $16,000 to save $34,000 is not beyond most imaginations.

But spending $16 trillion to save $34 trillion? Those are scary numbers, no matter which side of the cost-benefit equation they’re on. The mind shuts down contemplating them, and Sanders’ opponents are hoping voters will be so frightened of of either one, they won’t begin to consider the importance of the moon-shot-type project he’s proposing.

The problem is, $34 trillion isn’t the actual number, the actual cost of not addressing the climate crisis. Try ten times as much. The real cost of inaction is above $500 trillion.

The Cost of Climate Change

Consider this, from that famously alarmist, extremely hard-left news source Axios, in a piece entitled “The cost of climate change.” They begin with the obvious fact — the amount of wealth that exists on the planet today:

There’s $500 trillion of wealth on planet Earth, give or take: Maybe $230 trillion in land and property, $200 trillion in debt and $70 trillion in equity.

And then the obvious conclusion: All of it is at risk if the climate goes south while we go north (or vice versa). Actually, more than all of it if future wealth is considered.

Axios again:

The big picture: All of that wealth comes, ultimately, from the planet, and the climate. Specifically, it has come from a stable climate. William Nordhaus points out in his 2013 book “The Climate Casino” that “the last 7,000 years have been the most stable climatic period in more than 100,000 years.” The last 7,000 years have also seen the rise of civilization and the creation of that $500 trillion in wealth. This is not a coincidence.

  • Nordhaus won the Nobel Prize this week, in an announcement that coincided with the release of a hugely important UN Intergovernmental Panel on Climate Change report on what will happen to the world when it gets 1.5°C, or 2.7°F, warmer than preindustrial levels.

The report puts the cost of a 1.5°C increase at $54 trillion, in today’s money.

  • You think $54 trillion is a lot? That number comes from research that also says that a 2.0°C increase will cause $69 trillion of damage, and a 3.7°C increase will cause a stunning $551 trillion in damage.
  • $551 trillion is more than all the wealth currently existing in the world, which gives an indication of just how much richer humanity could become if we don’t first destroy our planet.
  • We’ll be environmentally richer, too. While it’s hard to put a dollar value on that, the value of environmental benefits has been rising steadily over time and will continue to do so. Already, we regret environmental destruction in the past and would happily give up a small fraction of our current wealth to undo it.

The bottom line for Axios: “Human civilization has reached the very end of reaping the dividends from a stable climate. Compared to recent decades, the world in 2100 will have a 13% reduction in crop yields (and those crops will also be less nutritious); it will also have 2.8 billion more people at risk from drought in any given month.”

The Axios solutions all come from the neoliberal playbook — encourage the market to address the problem via carbon taxes, and so on — with not a word about more forceful responses like ending carbon subsidies, getting carbon-fueled cars and truck off the road, and mandating the conversion power sources to alternative energy, as the Sanders plan contemplates.

Still, the good neoliberal folks at Axios get it. More than $500 trillion in wealth will disappear if we fail to address the coming climate crisis.

Now all they need to get is the need to force the solution, and not just encourage it.

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  1. John

    The scaremongering about Sanders’s plan baffles me.

    $16 trillion over 15 years is really not a lot of money when we’re talking about the survival of the species, even if you’re not an MMTer. I’m also very skeptical of Warren’s plan: $3 trillion over 10 years, but supposedly with “better regulation.” Considering the scale of the problem, I don’t think $3 trillion is going to be enough to fix it.

    Of course even Sanders’s plan won’t be enough. The amount of emissions that will come from building all of the new infrastructure and vehicles will be enough to put us over the edge, not to mention the environmental impacts from all the mining. And all of the vehicles we have now will just end up in third world countries for the next few decades even if we were able to convert to 100% electric vehicles tomorrow.

    At this point though, we still need to do what we can in terms of mitigation, because whatever geoengineering solution we might come up with to save the species will likely be safer/more effective with less carbon in the atmosphere.

    1. Tomonthebeach

      I agree, but prevention is one approach to climate change. Mexicans and Eastern Europeans will not be driving Teslas anytime soon. Like Mexico, South East Europe is the Northern EU’s dumping ground for 3rd hand cars and trucks.

      Another approach worth taking is preparing for inevitable climate change. Think of the Netherlands. The Dutch simply decided to engineer protection of their land and cities rather than to run for the proverbial hills. Cities like NYC, NO, Houston, Tampa/St. Pete, and Miami still have not woke to the fact that their cities are at extreme risk from tides, and that they should have started protecting the city from floods long ago. In their case, they would be well advised to read up on Venice as Miami Beach cannot be protected by dikes – Miami proper – maybe.

  2. cat sick

    I guess if we replace part of income taxes with carbon based taxes we can evoke some change quite easily, even at $20 a ton you will start to change the way corporations and people behave at $50 usd a ton maybe we can see a rapid fall in the use of coal and the terrible lignite the nasty Germans like to burn, given that the UK emits 6 tons a head its not going to cost a fraction of the military spend that nobody seems to question …

    On the other side of things planting forests is highly profitable at 20 usd a ton so there has to be a way to get things improving …

  3. PlutoniumKun

    A key point of course is that trying to mitigate climate change (and of course its largely too late for that) and building resilience for a future of catastrophic weather patterns are not mutually exclusive. Decentralised grids based on renewable energy are more resilient to storm damage than highly centralised grids based on thermal power (as the Japanese discovered after their great tsunami – wind turbines were back in operation within hours). More energy efficient homes and denser cities and transport and planting forest to reduce flood risks are all important integrated policy objectives that fulfil both vital objectives – mitigation and resilience.

  4. Bill Smith

    I remember being told that we should always leave the campsite cleaner than we found it, but If the US went ahead with some version of the Green plan and places like China and India don’t, will it be enough?

    1. drumlin woodchuckles

      It will be enough IF and ONLY IF . . . we ALso BAN every last little trace of economic and human contact between ourselves and every other country which does not adopt our anti-fossil tax or an even stronger anti-fossil tax.

      And if any other country or countries does indeed adopt, impose and enforce an anti-fossil tax even stronger than ours ( if we were to adopt one), they could ban contact with US until WE adopted the exact same even-stronger anti-fossil tax that they have adopted ( if they were to adopt one). And in that scenario, if we wanted to become unbanned from economic and human contact with such even better-stronger anti-fossil tax countries, we could adopt their even better-stronger anti-fossil tax.

      That would begin a Forced March to the Top instead of the Race to the Bottom which we now have. And “International Co-operation” is just another form of Race to the Bottom.

  5. Winston Smith

    The cost of Climate change? Mother Nature has put on her army boots and is kicking out. The very notion of talking about “cost” wrt Climate Change reveals the dissonance in human perception. As the french highwaymen used to say “la bourse ou la vie” i.e. your money or your life

    1. Plenue

      This idea that it’s the planet purging itself perplexes me, since the whole root of the problem is what humans have added to the system. This is literally the exact opposite of ‘Mother Nature’; we’ve done this to ourselves.

    2. Titus

      One hates to introduce reality based thinking into this subject but ah, economic growth isn’t going to happen. Not that the way we measure it, which as we know, often discussed here on NC makes no sense anyway. In addition world population growth is already slowing and based on historical trends is going further slow and decline very quickly. Again, not a model for growth. It is a model for destabilization, though. So, that needs some attention. Like it or not things as in how we live are going to get a lot simpler and a lot more local. A phrase used the other day here on NC I liked was ‘globalization recession’, as in receding. Well not sure of the exact wording but something like ‘Entropic Climate Recession’ is occurring as we speaking. First slow then all at once. We can either mange it or it will [family blog] manage us.

      1. drumlin woodchuckles

        Deep-Green minded jurisdictions might consider trying to achieve their own Separate Survival Security through a whole range of Transition Town Power Down type of preparations. They should try to craft their own local and super-local survival economies. ( And of course all the people in those jurisdictions could still pursue all the pleasures they can afford within the Global Pleasure Economy, so as to stay happy in the meantime. And when the Global Pleasure Economy collapses and dies, they will still have their own Separate Survival Micro-Local Economy, because they have taken the trouble to build it and grow it.)

        ” We don’t have to outrun the bear. We just have to outrun you.”

  6. Paul

    That cost is the factor, that is the cost of making industry pay for the damages their products do as they reap the rewards and stick us with the external costs of their products, both in price and the increasingly formerly unseen “costs” in terms of environmental degradation, in my mind simply proves we can not escape the unfolding and really now unstoppable damage to our habitat. Its not like we haven’t been told. Instead we want to frolic in the splendors of the fossil fuel fiesta and CAPITALism by mortgaging the future, formerly thought to be 2100, then 2050, then 2030. Irreversible feedback loops are set in motion, escape is not futile but it sure is going to be limited.

    1. John Wright

      re: “that is the cost of making industry pay for the damages their products do”.

      That is stating only the supply side of the equation. USA consumers could decide to drop their demand and not use an oil company’s product.

      The company’s revenue would drop dramatically. In the USA, companies such as Eastman Kodak, Polaroid and Sears-Roebuck (and other retailers) are evidence of companies that wither as consumer demand dries up.

      Getting USA and other countries’ consumers to consume much less, resulting in the dropping of hydrocarbon production and consumption is the core problem.

      As author Kurt Vonnegut said:

      “Dear future generations: Please accept our apologies. We were rolling drunk on petroleum.”

      1. drumlin woodchuckles

        Really? USA consumers could decide to drop their demand and not use an oil company’s product?
        That is certainly true in some cases. It is certainly possible to buy a wooden chair instead of a plastic chair. It is possible to buy shoes made of real leather and canvas and etc. instead of shoes made from oil.

        And it is NOT true in some other cases. People living a long hard commute from their job because they cannot afford to live near it ( and do not have any possible jobs anywhere near where they can afford to live) will not be able to stop using an oil company’s gas or diesel product. They can downscale to a smaller more efficient car. They can drive more efficiently, as in hypermiling

        But they can’t stop driving altogether, just as the Yellow Vesters in France can’t stop driving alltogether.

        Now . . . what would inspire individual survivalizing end-use retail-level consumers to do without an oil company’s product? Offer them convincing proof that if enough of them endure the thousands of individual pains of down-budgeting their thousands of individual oil uses, that their added-together personal pains can inflict a greater collective pain against the oil companies. Offer them a credible Hate Based Initiative. Show them how they can become a Thousand Points of Hate.

        After all . . . Hatred makes the World go ’round.

  7. Adam1

    One of the biggest problems with talking about climate change solutions is being able to be perspective about it – macro and micro. The average person can easily talk about small changes they’ve made but they can’t easily grasp how futile their effort really is. The change has to be on a massive scale for everyone. On the policy side, especially the neoliberal group, they can’t see the real micro issues. Just look at the yellow vest protests in France. Raising fuel taxes was a key tipping point for people. It wasn’t because they didn’t want to lower CO2 emissions and didn’t care about the environment. The tax “solution” did not provide a real path for them other than to suffering. Their costs were going to immediately go up which means consume less fuel or consume less of something else like food. There was no path provided for a struggling working class person to reduce their fuel consumption to adapt to the higher fuel cost. They were just going to have to suffer through it. And that is not going to advance the efforts of finding a real climate change solution.

    1. Tom Pfotzer

      I agree.

      * Don’t try to dig a mountain with a teaspoon. Scale the response so that it’s actually capable of solving the problem.

      * Change the set of economic tools available for the bulk of the population. Create products, services and jobs that fix the planet while making a living

      * Make a trade-in method to trade in your old economic life (products built and consumed, processes, capital investment) for new ones that actually fix the planet while you make your living.

      People are doing this now, but it’s new, not that well-understood. But it ain’t rocket science, and it seems pretty fun once you get the hang of it.

      1. drumlin woodchuckles

        And also be ready to pay more money for products and services based on fixing the planet.

        For example, Gabe Brown charges $20.00 a pound for his carbon capture eco-beef. And his customers pay that $20.00 a pound to get that carbon-capturing global-recooling beef. Those customers are putting their money where their virtue is. They are doing some genuine virtue-thingdoing.
        And they could virtue-horntoot the actual virtue-thingdoing they are actually doing by paying Farmer Brown to bio-capture and bio-store skycarbon in the soil under his livestocks’ feet.

  8. Mr Broken Record

    Was there any discussion regarding population? I’m dying to see how we feed 10 billion people (we should be there in about 20 years) with battery operated tractors

    1. drumlin woodchuckles

      A lot of those people will be feeding their own selves with animal and/or human labor out there on the land.
      And tractors can be run on bio-alcohol or bio-diesel in cases where tractors are still being used.

  9. Another Scott

    One of the things that I like about Sanders’ plan (but I think a lot of commentators dislike) is that his plan has direct federal investment in the power industry, owning the new assets. Given the high upfront costs of renewable energy, this means a major increase in the cost to the federal government, hence the high price tag. As the article mentions, this cost will be recouped by selling power, and given the lower borrowing costs, should cost less than having it be done by private firms. But there will likely be pushback from the companies which own (or would own) these facilities, including not only utilities and IPPs, but also hedge funds, insurance companies, and banks that play in this space, as well as the money Wall Street makes advising the deals.

    The alternate is to follow the current model, using the tax code, which lowers the apparent cost, but creates complex (and expensive) financing structures and essentially forces organizations that don’t pay taxes, such as municipal utilities, non-profit, and federal agencies, into long-term contracts with developers. This is a benefit to the owners of the power plants, but costs more to everyone else involved.

  10. Adam Eran

    Bloomberg’s interview with MMT’s Randall Wray discloses the MMT economists calculated that the government took over 50% of the economy for World War II. They also calculate that the Green New Deal would only amount to 5% of the economy. Mark Blythe estimates it will take something like a two-by-four smacking us in the forehead to get change. Actually, he says something like Miami losing drinking water would trigger an all-out pursuit of remedies.

    1. drumlin woodchuckles

      Miami losing drinking water would not be enough to do it.

      A category 6 or 7 hurricane razing Houston to the ground and killing a million people would be enough to do it.

      An F6 or F7 tornado with hailstones in it the size of basketballs razing a city like Oklahoma City all the way to the ground with several hundred thousand dead would be enough to do it.

      But anything less will not be enough to do it.

  11. Susan the other`

    If there actually is/was a plan and it is being followed it must be something like this: Slam the breaks on the consumer market – (2008 crash). Obliterate demand. Adjust accordingly. Support the banks because we need to slowly decelerate the monetary economy, (Gail Tverberg). I sincerely doubt that the “plan” included turfing the hardest hit people out of their houses and foreclosing on their homes. But no plan is perfect because the people implementing it also scam and skim it. Obama should not be admired for his cold hearted innocence. Ever. His was a truly shameful administration. But slowing the global economy by 30% was a massive undertaking. The rest, for now, is cleanup and reorganizing a sustainable economy. In the meantime we have homelessness and ocean rise to deal with and they dovetail. Multi family housing is urgent enough to drive the economy for several years. Then something else.

    1. jrs

      But it didn’t work except temporarily, even on those terms. If the plan was a Great Recession to get sustainability, we didn’t get it, let’s just take CO2 as to not get too lost in the details (I don’t think sustainability is improving in many other resources either unless anyone knows otherwise). CO2 used per year is higher than ever recently. So we didn’t get reductions, not long term.

      We got a DEMO that it is possible to sustain civilization and *reduce* carbon usage (happened in the Great Recession and maybe only then), that we don’t need from a production of goods and services standpoint to have as many people working as we do etc.. That life goes on as it was, except for the unemployed whose lives are shattered. So as for the unemployed: how to get the same results or better without making everyone miserable, because a recession like that does cause a great deal of human misery. Well I think there are ways, but I don’t see them without a comprehensive restructure of the economic system. That DEMO shows it’s possible, but how to do it humanely.

      1. Susan the other`

        Look at the oil industry. It is on the verge of serious recession. The demand is no longer there and they just keep pumping in a race to the bottom. So this is the free market in action. I’m almost amused by their plight. We’ve streamlined oil production and we’re close to settling up just who has vested interest in the future of oil. We’ve build pipelines for efficiency. We know we have to conserve this resource because the planet can’t cold turkey. But we also know that there is a maximum use limit in order to stabilize the climate so the planet is still livable. I personally think the writing is on the wall for some kind of nationalization in order to subsidize the oil industry with the money it needs to keep pumping. As it is they are in a spiral and they can’t go on much longer. This might explain the rush to IPO Aramco, because corporations have been saved by central banks now since 2008. That’s one way to pretend the economy still functions on a capitalist paradigm, but it actually is now state capitalism. Whatever that is – it can be a useful transition to sustainability. Reverse privatizations as necessary.

        1. drumlin woodchuckles

          How many “Team Blue” users of oil could cut back their use of oil so hard and sharp that they could force the chaotic extermination of large parts of the oil industry before our Overclass-captured government could co-ordinate the “nationalization” ( subsidy-rescue) of the surviving parts and pieces?

          Do the individual citizen-members of “Team Blue” really personally care enough to co-ordinate eachothers’ personal buy-use behaviors to get the buy-use behaviors of a hundred million people focused on the goal of chaotic oil-market collapse to achieve chaotic-oil business extermination?

  12. Rod

    it’s big and it’s complicated and it’s confusing, but it is not without solutions–as this commentariat can visualize.
    but not with yesterdays economies and motivations, for sure.

    stand in Unity on September 20th –see for info on the Global Strike on Climate Change
    if you are working your own values to address this, then stand with others and see you are not alone by any means and that actions are now starting–World Wide

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