Before exploring the costs of action and inaction against climate change I find it important to note that global climate change and its potential causes are not and can’t be objectively proven. I have my opinions on the matter, but a vast majority of experts agree that humans are causing the globe to warm. Presenting the evidence that supports climate change would take far too long so I will be writing this under the assumption that said evidence is true. This warrants a look into what costs might face the country and the human race whether we choose to take action against the issue or not.
Commonly cited industries that are believed to be most at risk from climate change include agriculture, insurance, and tourism. Looking in depth at agriculture, crops, livestock, and fisheries contribute nearly $330 billion to U.S. GDP each year. There were just over 2 million farms employing 827,000 people across America in 2014.
Agriculture is inherently tied to the climate and rising temperatures could cause huge losses. These effects are explained in detail by the EPA. Along with rising temperatures, climate change brings raised levels of CO2 in the atmosphere and an increase in the frequency and severity of extreme weather events such as droughts and floods. Different crops have different optimal temperatures so rising temperatures could have a positive or negative effect on crop yields in the short term. If climate change goes unchecked, temperatures could rise to a point beyond the optimal temperature for most plants. Raised levels of CO2 in the atmosphere reduce the nutritional value of most crops. This could lead to increased pressure on farmers to produce more crops at a time when the climate is also reducing yields. An increase in the severity and frequency of droughts has the obvious effect of reducing crop yields and an increased potential of greater crop death. Slightly less intuitive is the idea that increased rainfall and severity of rain storms can actually inhibit the growth of crops and reduce yields. Weeds and pests thrive in this new hotter and wetter climate with more atmospheric CO2. American farmers already spend $11 billion a year fighting weeds and increase in the costs and use of pesticides is expected if current climate trends continue. These factors together could make growing crops in America very expensive at best and impossible at worst.
A Similar effect is expected within the livestock category of agriculture. Rising temperatures and more high heat events can stress animals. This can increase their vulnerability to disease, reduce fertility, and reduce production of milk and eggs. Decreases in crop yields and increased droughts could result in a reduction of food sources and grazing area for animals, reducing the amount of animals farmers are able to sustain. As a result of decreased plant quality from increased levels of CO2, livestock that feed on these plants will need to eat more to maintain the same nutrition levels.
A little known fact is that the ocean absorbs about a quarter of all human CO2 emissions. This roughly equals the amount absorbed by all plants on the planet. But recent increases inCO2 emission has caused the oceans to become more acidic over time. Without even considering the effects of overfishing and water pollution, climate change alone will put major stress on the American fishing industry over the next century. As of 2012, the fishing industry contributed $1.55 billion to U.S. GDP annually. Rising temperatures and water acidity offer no benefits to the industry. Higher temperatures cause marine life to seek colder water, creating increased competition for food and ecosystem instability. There has been an increase in disease outbreaks attributed to rising temperatures. Higher acidity can destabilize entire ecosystems leading to widespread declines in fish populations.
The entire agriculture industry, accounting for 5.5 percent of U.S. GDP when related industries are included, is in grave danger if we do nothing about climate change. But it’s not the only American industry that is projected to suffer losses if no action is taken. Provision of water to all the areas and industries that need it across America is expected to cost $950 billion by 2100 if the status quo is maintained. As mentioned earlier, the insurance industry is also in danger of increased costs. By the year 2100, real estate losses from more frequent and severe extreme weather events, and rising sea levels are estimated to cost $360 billion. Similarly, economic losses from more severe hurricanes are estimated to be $422 billion. If nothing is done to combat climate change in America, trillions of dollars could potentially be lost. To add to this, evidence shows that as temperature rises, productivity suffers. If temperatures continue to rise in the U.S. productivity could begin to lag at a time we would need to be even more productive to maintain current needs.
A quality unique to the issue of climate is change is the fact that the problems that arise from it are ubiquitous. There isn’t a single group, party, country, or continent that this problem will affect differently. This is not a problem that the U.S. or any other country can fix alone. It will take the efforts of the entire human race to take action against the effects of climate change. With that in mind it is important to look at the costs associated with climate change action and inaction that could be faced by the entire world.
All of the same consequences of climate change faced by the U.S. will occur across the globe. Rising average temperatures, more atmospheric CO2, raised oceanic acidity, rising sea levels can be expected. Similarly, all the effects are the same: fewer crops, less marine life, less food, more frequent and severe weather, more hurricanes, and lower productivity. Over the next 100 years these effects are expected to arise gradually over the next 100 years. Given the time frame, some uncertainty has to be incorporated into projections made for costs. A paper published by Citi in 2015 extensively examines the global effects of climate change. When determining the cost of inaction, three possible scenarios were considered for low, average, and high consequences of climate change. Under these scenarios, estimated losses in global GDP range from$ 20 trillion to $72 trillion by 2060.
The only way to effectively take action against climate change is on a global level. Two suggested actions are incentivizing a low carbon path or punishment for those who don’t adopt a low carbon path. The two ways of achieving this are prohibitive legislation and an economic instrument with the goal of putting a price on carbon. Enacting policies such that climate change is controlled to a “sustainable level” will be a difficult task. Bringing together many different countries with differing cultures and levels of technological is no small feat but there is of course a cost associated with said policies. Citi compares the damages avoided from inaction to the cost of the necessary policies to derive a rate of return on the investment in action against climate change. Estimates for this rate of return range from 1-4 percent up to 2021 when the greatest shift away from the current path is necessary. However by 2035 as the most damaging effects of climate change would have begun to arise, the rate of return increases to 3-10 percent. Compared to current comparable yields, this looks like an attractive investment. So not only is it possible that we could save the planet trillions of dollars in global GDP, if we act fast we might actually be making a solid investment. Current evidence suggests that this problem isn’t likely to go away, and that it’s more than likely to get worse. The safe route would be to take action and make the decision before it’s made for us. The longer we wait the more expensive it will be to mitigate the effects of climate change. Ultimately it seems clear to me that the monetary costs and the hassle involved with collectively making the change to become environmentally sustainable are outweighed by the costs and damages we could be forced to face if we do nothing.