Do the Benefits of Climate Change Outweigh the Costs?

Do the Benefits of Climate Change Outweigh the Costs?
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The climate is currently in a phase of rapid, human-caused change. Concentrations of carbon dioxide in the atmosphere are increasing. Global average temperature is rising. Arctic ice is melting. Sea levels are increasing.

While the overarching fact of manmade climate change is no longer debatable, a few facets are open to legitimate questioning. How bad will global warming really be? Are climate models really all that accurate? Is it better to mitigate or adapt to climate change? Will climate change actually produce net benefits?

The last question is perhaps the hardest to quantify, but it's also the most interesting. I'll broadly attempt to tackle it today.

Climate change will not be uniformly bad. Some parts of the world and their inhabitants will see benefits, others harms. Farmers in Denmark and Canada will enjoy longer and more productive growing seasons. Cold weather deaths will fall, particularly in northern latitudes. On the other hand, the average amount of time it takes for ecosystems to recover from drought is increasing. Moreover, many island nations may be essentially uninhabitable or even completely underwater due to rising sea levels.

In 2009, University of Sussex environmental economist Richard S.J. Tol attempted to estimate the economic effects of climate change. From synthesizing a dozen studies conducted between 1994 and 2006, he estimated that climate change would provide a net 1.5 percent increase to global economic output by 2025, reducing to 1.2 percent by 2050, before starting to harm economic output after 2080. Tol projected economic harms to rapidly accelerate after that point.

Four years later, journalist Matt Ridley used Tol's paper to argue that, "Climate change has done more good than harm so far and is likely to continue doing so for most of this century. This is not some barmy, right-wing fantasy; it is the consensus of expert opinion."

Ridley's statement was a tad overblown then, and it's certainly out-of-date now. Tol's review was widely criticized and only brought together research from six study groups, which hardly represents a "consensus". Moreover, the paper later was corrected to move up the time at which economic output would see net harm to roughly 2075.

In the past few years, additional studies have tackled the question of climate change economics. The vast majority show net harms. A study published in 2015 to Nature Climate Change found that warming temperatures will particularly hinder GDP growth in poorer countries. The Energy and Climate Intelligence Unit says that damages to public health from burning fossil fuels already cost 4% of GDP in the fifteen countries with the highest emissions. Just recently, researchers publishing in the journal Nature found that "limiting global warming to 1.5 degrees Celsius would likely save the global economy more than $20 trillion by the year 2100 as compared to 2 degrees Celsius warming—at a cost of about $300 billion," Dana Nuccitelli summarized for the Bulletin of the Atomic Scientists, adding, "That means the benefits of curbing climate change would exceed the costs by about 70-to-1."

Absent from much of these analyses are the moral costs of species extinction, habitat destruction, and forcing climate refugees from their longtime homes. Are climate-warming activities worth these injustices?

In the end, even Tol's rosy outlook on the net costs and benefits of climate change acknowledges that by 2075, climate change will do net damage. Since mitigation, and in a lot of cases, adaptation, will take time to implement and to reduce atmospheric greenhouse gas concentrations, any decided upon actions should begin as soon as possible. Per Tol's analysis, this would permit us to enjoy any benefits of warming now while limiting the deleterious effects estimated to arrive later this century.

Though Ridley neglected to mention it in his article, Tol advocates a gradually increasing carbon tax.

"There is a strong case for near-term action on climate change, although prudence may dictate phasing in a higher cost of carbon over time, both to ease the transition and to give analysts the ongoing ability to evaluate costs, benefits, and policy mechanisms," he reasonably writes.

Sensible solutions now will help ensure that our children and grandchildren will prosper in a world that's not too hot, not too cold, but just right.

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