One climate economists has suggested that the best way to reach conservatives on climate change is through being “radically practical.” Most people want to see more action on climate change but some are reluctant due to the costs to the economy. This is the case for US Republicans and Canadian Conservatives. Rather than examine the human devastation caused by climate change a purely economic appraisal may be more likely to reach conservatives. There are a number of reports that convincingly make the point that climate change is both a business risk and the source of trillions of dollars worth of costs.
At a May 5th CIGI Signature Lecture called “Breaking Climate Inertia: A Radically Practical Approach,” author, economist and professor at McGill University, Chris Ragan explored climate policy solutions that even conservatives can get behind.
Ragan has been a professor of economics at McGill University since 1989. He is also a Research Fellow at the C.D. Howe Institute where from 2010 through 2013 he held the Institute’s David Dodge Chair in Monetary Policy, and for many years was a member of the Institute’s Monetary Policy Council. Ragan is also the author of
“Economics”, the most widely used introductory economics textbook in Canada, and has a regular column in The Globe and Mail.
According to Ragan the key to finding middle ground is getting “radically practical.” Although he was addressing a Canadian audience this could also apply to fiscal conservatives who are concerned about the economic implications of combating climate change.
Ragan’s research based solution respond to two basic policy questions, integral to the debate:
1. What is the most cost-effective way to achieve greenhouse gas reductions that aligns with Canadian economic prosperity?
2. What is the most pragmatic way to achieve those reductions in the context of a highly diverse Canadian federation?
The answers he provides to these two questions are capable of uniting people across the political spectrum.
Climate change is already costing people in treasure and lives. A Ceres report indicates that climate change already costs every taxpayer $300 per year in the US.
In light of The Risky Business report and others, it is clear that the costs of climate change are considerable and the costs of inaction are far greater than the costs of acting. According to a 2011 report by 2100, the costs of inaction on climate change will outweigh the costs of addressing the problem by $8 trillion.
Two reports released in April 2015 corroborate the high costs of climate change. According to a the World Health Organization, the financial costs of air pollution in Europe alone amounts to $1.6tn each year. A US Energy Department report indicates that extreme weather in the US costs about $33 billion each year.
According to a Tufts University report commissioned by the NRDC, the costs of inaction to the US economy is equivalent to more than $3.8 trillion annually or 3.6 percent of the nation’s GDP by 2100.
A purely pragmatic appraisal of the expenditures required to engage
climate change can be shown to far exceed the costs of inaction. A cost benefit analysis makes it clear that the advantages of addressing climate change far outweigh the costs.