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The Economics of Global Warming

Climate
The Economics of Global Warming

Those who don’t outright deny the existence of human-caused global warming often argue we can’t or shouldn’t do anything about it because it would be too costly. Take Prime Minister Stephen Harper, who recently said, “No matter what they say, no country is going to take actions that are going to deliberately destroy jobs and growth in their country.”

Those who fear or reject change are running out of excuses as humanity runs out of time.
Photo credit: Shutterstock

But in failing to act on global warming, many leaders are putting jobs and economic prosperity at risk, according to recent studies. It’s suicidal, both economically and literally, to focus on the fossil fuel industry’s limited, short-term economic benefits at the expense of long-term prosperity, human health and the natural systems, plants and animals that make our well-being and survival possible. Those who refuse to take climate change seriously are subjecting us to enormous economic risks and foregoing the numerous benefits that solutions would bring.

The World Bank—hardly a radical organization—is behind one study. While still viewing the problem and solutions through the lens of outmoded economic thinking, its report demolishes arguments made by the likes of Stephen Harper.

“Climate change poses a severe risk to global economic stability,” said World Bank Group president Jim Yong Kim in a news release, adding, “We believe it’s possible to reduce emissions and deliver jobs and economic opportunity, while also cutting health care and energy costs.”

Risky Business, a report by prominent U.S. Republicans and Democrats, concludes, “The U.S. economy faces significant risks from unmitigated climate change,” especially in coastal regions and agricultural areas.

We’re making the same mistake with climate change we made leading to the economic meltdown of 2008, according to Henry Paulson, who served as treasury secretary under George W. Bush and sponsored the U.S. bipartisan report with former hedge fund executive Tom Steyer and former New York mayor Michael Bloomberg. “But climate change is a more intractable problem,” he argued in the New York Times. “That means the decisions we’re making today—to continue along a path that’s almost entirely carbon-dependent—are locking us in for long-term consequences that we will not be able to change but only adapt to, at enormous cost.”

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Both studies recommend carbon pricing as one method to address the climate crisis, with the World Bank arguing for “regulations, taxes and incentives to stimulate a shift to clean transportation, improved industrial energy efficiency and more energy efficient buildings and appliances.” 

Contrast that with Harper and Australian Prime Minister Tony Abbott’s recent mutual back-patting in Ottawa. Appearing oblivious to the reality of global warming and economic principles, both rejected the idea of a “job-killing carbon tax.”

One Risky Business author, former Clinton treasury secretary Robert Rubin, also warned about the economic risks of relying on “stranded assets”—resources that must stay in the ground if we are to avoid dangerous levels of climate change, including much of the bitumen in Canada’s tar sands.

In a commentary in Nature, a multidisciplinary group of economists, scientists and other experts called for a moratorium on all oil sands expansion and transportation projects such as pipelines because of what they described in a news release as the “failure to adequately address carbon emissions or the cumulative effect of multiple projects.” They want “Canada and the United States to develop a joint North American road map for energy development that recognizes the true social and environmental costs of infrastructure projects as well as account for national and international commitments to reduce carbon emissions.”

Those who fear or reject change are running out of excuses as humanity runs out of time. Pitting the natural environment against the human-invented economy and placing higher value on the latter is foolish. These reports show it’s time to consign that false dichotomy to the same dustbin as other debunked and discredited rubbish spread by those who profit from sowing doubt and confusion about global warming.

“Climate inaction inflicts costs that escalate every day,” World Bank Group vice-president Rachel Kyte said, adding its study “makes the case for actions that save lives, create jobs, grow economies and, at the same time, slow the rate of climate change. We place ourselves and our children at peril if we ignore these opportunities.”

If our leaders can’t comprehend that, let’s find some who can.

Written with Contributions from David Suzuki Foundation Senior Editor Ian Hanington.

A plume of smoke from wildfires burning in the Angeles National Forest is seen from downtown Los Angeles on Aug. 29, 2009 in Los Angeles, California. Kevork Djansezian / Getty Images

California is bracing for rare January wildfires this week amid damaging Santa Ana winds coupled with unusually hot and dry winter weather.

High winds, gusting up to 80- to 90 miles per hour in some parts of the state, are expected to last through Wednesday evening. Nearly the entire state has been in a drought for months, according to the U.S. Drought Monitor, which, alongside summerlike temperatures, has left vegetation dry and flammable.

Utilities Southern California Edison and PG&E, which serves the central and northern portions of the state, warned it may preemptively shut off power to hundreds of thousands of customers to reduce the risk of electrical fires sparked by trees and branches falling on live power lines. The rare January fire conditions come on the heels of the worst wildfire season ever recorded in California, as climate change exacerbates the factors causing fires to be more frequent and severe.

California is also experiencing the most severe surge of COVID-19 cases since the beginning of the pandemic, with hospitals and ICUs over capacity and a stay-at-home order in place. Wildfire smoke can increase the risk of adverse health effects due to COVID, and evacuations forcing people to crowd into shelters could further spread the virus.

As reported by AccuWeather:

In the atmosphere, air flows from high to low pressure. The setup into Wednesday is like having two giant atmospheric fans working as a team with one pulling and the other pushing the air in the same direction.
Normally, mountains to the north and east of Los Angeles would protect the downtown which sits in a basin. However, with the assistance of the offshore storm, there will be areas of gusty winds even in the L.A. Basin. The winds may get strong enough in parts of the basin to break tree limbs and lead to sporadic power outages and sparks that could ignite fires.
"Typically, Santa Ana winds stay out of downtown Los Angeles and the L.A. Basin, but this time, conditions may set up just right to bring 30- to 40-mph wind gusts even in those typically calm condition areas," said AccuWeather Senior Meteorologist Mike Doll.

For a deeper dive:

AP, LA Times, San Francisco Chronicle, Washington Post, Weather Channel, AccuWeather, New York Times, Slideshow: New York Times; Climate Signals Background: Wildfires, 2020 Western wildfire season

For more climate change and clean energy news, you can follow Climate Nexus on Twitter and Facebook, sign up for daily Hot News, and visit their news site, Nexus Media News.

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