Cost is a commonly cited reason for resistance to climate action, however when we factor co-benefits and the real costs of inaction the logic for action is overwhelming Research shows that when we include reduced death and disease as well as increased technological innovation and other co-benefits, the costs of climate action offer a net economic benefit.
When we add up the costs of action and compare them to the costs of inaction the value equation becomes clear. The benefits of climate action far outweigh the costs. This includes $160 trillion dollars worth of savings associated with climate action and massive risks associated with inaction. According to the U.K.’s National Oceanographic Centre, the costs of sea-level rise alone could exceed $14 trillion a year by 2100. The costs are already being felt. According to a Nature article, CO2 emissions in 2017, have a global impact of more than $16 trillion.
In a 2018 Guardian article Damian Carrington says that climate action will save the world $30 trillion in damages which is far more than the costs of cutting carbon emissions. Citing an article published in Nature Carrington writes, “Data from the last 50 years shows clearly that when temperatures rise, GDP and other economic measures fall in most nations, due to impacts on factors including labour productivity, agricultural output and health.”
An Economist report titled the “Cost of Inaction,” the costs could be as high as $29 and $41 trillion by 2030. These numbers were calculated using by considering the effect climate change will have on the growth of dividends. In 2013 the stock of manageable assets was $143 trillion as estimated by the Financial Stability Board, updated based on EIU data in 2015 suggests that number is $207 trillion. The study suggests the value at risk in 2030 may be equivalent to a permanent reduction of between 5 and 20 percent which translates to 28 trillion and 41 trillion
A 2016 UN brief suggested that studies often ignore the co-benefits of climate action. A UN report found that air pollution may reduce the GDP by more than 10 percent in some countries while halving GHG emissions could reduce premature deaths related to air pollution by 20 to 40 percent. We are already seeing economic benefits.
LSE research by Hamilton et al suggests that the health co-benefits of reducing greenhouse gas emissions could be worth $100 US per tonne of CO2 in high-income countries like the U.S. and Canada and $50 US per tonne in middle-income countries like China. The study indicated that in some forest projects to mitigate climate change, co-benefits represent between 53 to 92 per cent of total benefits. Co-benefits typically represent more than 50 percent of direct benefits from investments in
energy efficiency and renewable energy. Reducing fossil fuel dependence in the U.S. decreases the danger of disruptions in the energy supply and economic losses due to price volatility.
A map of co-benefits reveals underscores the value of climate action. In collaboration with the B.C. government’s Climate Action Secretariat, Ann Dale, a professor in the School of Environment and Sustainability at Royal Roads University, has mapped some of the co-benefits of climate change action. The map shows that greener buildings lead to higher energy efficiency, better water quality, and new job opportunities: “So that you can show to political decision makers it’s not jobs versus on the environment — there’s money to be saved by doing the right thing, and there are benefits to be achieved”.
As reported by CBC, Deborah Harford, executive director of the Adaptation to Climate Change team at Simon Fraser said climate action makes economic sense. “This new narrative about low-carbon resilience and all the co-benefits is literally emerging now and is actually starting to be taken up very quickly,” Harford said. While she warned that failing to act will have longer term adverse economic impacts. “Countries that fail to get on this new shift are going to be the ones that are left behind in the new economy,” she said. “Because it’s coming.”
The economic merits of renewable energy already provide far more jobs than the fossil fuel industry. According to research by Standford University professor, Mark Jacobson published in the journal One Earth, going green, including transitioning from fossil fuels to renewables, will pay for itself in seven years. According to Jacobson, the initial costs of $73 trillion will be offset by $11 trillion in savings each year.
“There’s really no downside to making this transition,” said Jacobson, who wrote the study with several other researchers. “Most people are afraid it will be too expensive. Hopefully, this will allay some of those fears.”
There is an overwhelming financial logic driving the transition to a green economy. These powerful incentives combine with the even more powerful disincentive of economic costs associated with runaway climate change.