White House: $150 Billion a Year Will Be Cost of Climate Inaction
Damage to public health and biodiversity, as well as physical impacts from rising seas and more severe storms, droughts and wildfires will add up quickly.
Katherine Bagley, InsideClimate News Jul 29, 2014
Seeking to blunt Congressional criticism of its climate agenda, and in particular its new power plant rule, the White House released a report on Tuesday that argues the world could face severe economic consequences if it doesn't act now to curb global warming.
Allowing warming to pass safe levels and reach 3 degrees Celsius could cause damage amounting to 0.9 percent of global economic output each year, according to the new report from the White House's Council of Economic Advisers, a three-member group that counsels the president on economic policy.
That level of warming would cost the United States about $150 billion a year in today's dollars. It will come in the form of damage to public health and biodiversity, as well as physical impacts from rising seas and more severe storms, droughts and wildfires.
"The incremental cost of an additional degree of warming beyond 3° Celsius would be even greater," the report warned. With a rise from 3 to 4 degrees of warming, the world "would incur greater additional annual costs of approximately 1.2 percent of global output," as dangerous climate effects become permanent and the cost to mitigate the climate problem soars.
"These costs are not one-time: they are incurred year after year because of the permanent damage caused by additional climate change resulting from the delay," it said.
The report is based on conservative estimates.
Already, earth's climate has warmed by 1 degree Celsius. Countries aiming to cement a global climate change treaty in 2015 through UN negotiations are targeting a 2 degrees Celsius rise, the accepted threshold after which catastrophic damage from warming will be near certain. But that 2-degree goal is quickly slipping away. Scientists frequently warn that every year without action increases the likelihood that nations will face 3 or more degrees of warming.
The 33-page report from the Council of Economic Advisers is the latest maneuver in a long series of executive actions rolled out under President Obama's climate action plan. It comes as criticism from Congressional Republicans against the administration's agenda hits a fever pitch, and it allows the White House to try to justify its actions, said Martin Weitzman, an environmental economist at Harvard University.
"It is smart of them," he said. "It uses a semi-technical paper to document the underlying logic behind their whole agenda."
This week public hearings started for the Environmental Protection Agency's plan to control greenhouse gas emissions from more than 1,000 power plants. Known as the Clean Power Plan, the initiative is the cornerstone of the Obama administration's climate work and is designed to achieve a 30 percent reduction in emissions by 2030, from 2005 levels. The EPA estimates the carbon rules will result in economic benefits of $27 to 50 billion each year in 2020, and $49 to 84 billion in 2030. This is largely due to reducing greenhouse gas concentrations, and therefore climate impacts, but also secondary benefits such as cutting particulate emissions in the air that cause asthma and other health problems.
While the plan has received widespread support from environmentalists, the regulations have faced intense scrutiny by conservative and fossil fuel industry groups and their allies in Congress. That has led to endless Congressional hearings and a lawsuit by nine coal-producing states and Murray Energy Corp, the largest independently owned coal company in the United States.
According to the report, measures taken today—such as the EPA's carbon regulations—could drastically reduce economies' climate bill later on. For every decade of inaction, the costs to control global warming rise 40 percent on average.
"We face significant uncertainty about the timing, magnitude and full consequences" of climate change, Jason Furman, chairman of the Council of Economic Advisers, told reporters on Monday. "Some point to that uncertainty to argue that we should wait to act… But this report shows delaying action will significantly increase the cost of climate change."
Weitzman said the findings are not revolutionary, but instead they echo what the economic community has been warning for several years. Last month, a report by former New York City Mayor Michael Bloomberg, hedge fund manager Tom Steyer, and former Treasury Secretary Henry Paulson found that climate change will cost the U.S. billions of dollars in physical damage, lost productivity from outdoor workers, and increased energy costs if it fails to act on climate.
"It is nice to see the work getting treatment on a larger scale," Weitzman said of the White House report.