Reasonable climate goals must consider costs as well as benefits


On February 28, the Intergovernmental Panel on Climate Change (IPCC) released another landmark report examining the likely damage to societies and ecosystems that will result from ongoing climate change. It Wasn’t Pretty – an “Atlas of Human Suffering” in words by UN Secretary General António Guterres.

All the fearsome riders of the climate-pocalypse marched in the public square to warn of the consequences of continued climate inaction. The sober scientific assessment of the Working Group II (WG II) contribution to the IPCC’s Sixth Assessment Report came with the idea that losses would be greatly reduced if we limited the temperature increase to 1 .5°C max. This refers to one of the temperature anomaly targets enshrined in the Paris Agreement, along with the more permissive 2°C.

To be clear, there’s little science behind these threshold choices, which is why they’re such round numbers. Instead, they were chosen by policy makers trying to prove urgent action from a reluctant world. There is no clear threshold beyond which hazards are reliably known to be unacceptable.

Rather, the problem is that we’re sailing off the edge of the map into uncharted climatic waters, and if there are monsters out there, we’re unlikely to avoid them. Moving closer to the historic climate would clearly be a safer choice for ecosystems and societies.

Cost tempers climate action

Climate activists who will use the WGII ​​report as a spur to faster climate action are likely to be well-meaning, and the climate impacts they will seek to warn us about are indeed potentially disastrous, but there is a force tempering our action. that is rarely openly acknowledged when discussing climate goals, and that power is money.

The simple fact is that limiting climate change to 1.5°C (2.7 degrees Fahrenheit) by mid-century would be extremely costly. McKinsey just estimated the cost to $9.2 trillion a year, every year by 2050. That’s more than 10% of gross world production and would be an industrial enterprise roughly twice the size of the entire fossil fuel industry.

Much of this spending would result from the fact that we would need to force a premature migration away from cheap and “shippable” fossil fuels in favor of renewable forms of energy which are increasingly economical to produce but require storage and a much more extensive and expensive transmission. Infrastructure.

We would force such a transition in part by internalizing the “mother of all externalities” and imposing a direct or indirect tax on carbon emissions. It would make almost everything more expensive, but provide a financial incentive to move away from high-emitting lifestyles, processes, and energy sources. It would stunt economic growth and make everyone a little poorer.

None of this is meant to suggest that it may not be the right choice, either economically or ethically. Our greenhouse gas emissions will cause real costs and harms to people – a little in the near future, but much more in the more distant future. But like many things, ambitious climate goals would deliver a benefit, but at a cost.

Most climate talk in the popular press assumes that the best climate target is the lowest, because that will minimize climate damage. That’s a good thing in and of itself, but it ignores the fact that the lowest goals have the highest transition costs. Allowing temperatures to rise 3°C or more above the late 19th century baseline would require very little short-term economic sacrifice, but could ruin the environment for future generations.

Limiting climate change to 1.5°C would likely preserve an acceptable environment, but at a short-term cost that the world has so far refused to bear. As the famous Nobel laureate William Nordhaus described it, the dilemma is between “destroy the economy and destroy the world”.

This dilemma is all the more frustrating because of the intergenerational disconnect it encompasses. It is ethically untenable to bask today in a high-consumption lifestyle knowing that we will export the environmental consequences of associated emissions to future generations.

But it also proved very difficult to convince the living to sacrifice themselves in any meaningful way for the benefit of the unborn child. Our successors on this planet would no doubt urge us to undertake economic sacrifices for their future benefit, but such a sacrifice carries undesirable consequences for the present.

Financial charges must be taken into account

None of the foregoing is intended to imply skepticism of climate science or the work products of the IPCC. Rampant climate change is a grave danger to humanity and the natural world on which we depend, especially as we try by the end of the century to cram more than 10 billion souls onto a planet that had them. less than 10% in 1800.

The IPCC is the gold standard of climate science, and the dangerous future impacts it has once again vividly portrayed should be viewed with great trepidation.

But in seeking to articulate reasonable climate goals, it is not just the benefits of radical action that must be considered, but also the costs, and the financial burden on the current generation of limiting climate change to 1, 5°C would be huge. That’s why, despite the insistence of climate rebukes (myself included) that we need faster climate action, humanity’s revealed preference when asked how much climate change they want has so far always been – “more”.

This article does not necessarily reflect the views of the Bureau of National Affairs, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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wake up smith is a lecturer at Yale University where he teaches a world-renowned undergraduate course on climate intervention, the curriculum of which forms the basis of his book “Pandora’s Toolbox: The Hopes and Hazards of Climate Intervention”.


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