Why Fixing Climate Change May Turn Out to Be a Bargain

Climate change threatens lives and livelihoods as greenhouse gases build up in the atmosphere, yet the main argument for doing nothing is that doing anything would be too expensive. Some prominent skeptics even argue that laws designed to stop climate change would "destroy the economy."

According to a pair of reports, however, such warnings may be hot air. Not only is inaction even costlier than action, but action might turn out to be more affordable than most people realize. Reining in the greenhouse gas emissions that fuel climate change will have upfront costs, the reports acknowledge, but secondary benefits — like stable energy supplies, lower fuel costs and fewer premature deaths from air pollution — can offset those costs on a global scale, essentially paying us to phase out fossil fuels.

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Due to falling prices, more than half of new electricity generation by 2030 is expected to come from renewable energy. (Photo: Getty Images)

One of the studies, "The New Climate Economy," was released by the Global Commission on the Economy and Climate (GCEC), an independent group of political and financial leaders chaired by former Mexican President and economist Felipe Calderón. It suggests "countries at all income levels" can reduce their risk from climate change and build "lasting economic growth" at the same time. That doesn't mean fighting climate change will cost the same for every country, but if you assign dollar values to things like saving lives and preventing illnesses, it apparently does balance out globally.

"For years we've heard that fighting climate change will hurt economic growth," Calderón writes in an op-ed about the report. "But new analysis finds this is simply not true. In fact, reducing greenhouse gas emissions requires action in the very same areas that throughout history have driven economic growth: investment in efficiency, infrastructure and innovation. Well-managed policy and business investment in these fields can create growth and reduce the risks of dangerous climate change at the same time."

The other study, by the University of Massachusetts Political Economy Research Institute (PERI) and the Center for American Progress (CAP), suggests the U.S. can create 2.7 million clean-energy jobs while curbing its carbon emissions 40 percent from 2005 levels over the next 20 years.

"Stabilizing climate change requires a transformational shift in how we construct, finance and deploy our energy infrastructure," it states. "This report quantifies that shift by outlining the challenging but feasible steps that can help restore a climate balance and increase overall U.S. employment in the process."

Both reports come at an auspicious time for climate optimism, thanks to the People's Climate March and U.N. Climate Summit 2014 in New York City. The People's Climate March is expected to draw 100,000 people on Sept. 21, backed by thousands more at joint marches in cities worldwide. Its goal is to show world leaders their constituents care about climate change and want them to as well. The U.N. Climate Summit on Sept. 23, which isn't part of formal U.N. climate talks, is similarly meant to "raise political will and mobilize action" ahead of a major climate conference in Paris next year.

That Paris meeting is expected to be a pivotal event in international climate negotiations, with experts predicting record attendance and scientists warning it may be humanity's best remaining chance to avert catastrophic climate upheaval. This month's one-day U.N. Climate Summit is sort of a pep rally for Paris, designed to "show that leaders across sectors and at all levels are taking action, thus expanding the reach of what is possible today, in 2015, and beyond."

Carbon dioxide, the main greenhouse gas emitted by human activities, is now more abundant in Earth's atmosphere than ever before in human history. It reached a concentration of 400 parts per million for several days in 2013, and then averaged above 400 ppm for a full three months in 2014. Earlier this month, the World Meteorological Organization (WMO) reported that CO2 levels rose faster in 2013 than at any point since scientists began keeping detailed annual data on CO2 emissions in the 1980s.

"Carbon dioxide remains in the atmosphere for many hundreds of years and in the ocean for even longer," WMO Secretary-General Michel Jarraud said in a press release about the group's Greenhouse Gas Bulletin. "Past, present and future CO2 emissions will have a cumulative impact on both global warming and ocean acidification. The laws of physics are non-negotiable."

Earth's atmosphere now holds more CO2 than it has since the Pliocene Epoch, before modern humans existed. (Photo: NASA)

Climate change is already taking a financial toll worldwide, promoting more big storms as well as megadroughts, wildfires, food shortages and other disasters. And since $90 trillion is forecast to be spent on global infrastructure over the next 15 years anyway, the GCEC suggests governments curb CO2 emissions by sending market signals to nudge that investment toward less carbon-intensive options. The U.S. is doing that, for example, by setting limits on CO2 emitted by vehicles and power plants.

"The choices made in the next 15 years will either lock in a future with growing pollution and worsening climate change, or help move the world onto a more sustainable, low-carbon development path," the authors of the GCEC report write. "Many of the policy and institutional reforms needed to revitalise growth and improve well-being over the next 15 years can also reduce climate risk. Potential 'win-win' reforms in urban, land use and energy system would involve correcting market and government failures that now make economies less efficient than they could be."

A "win-win" reform isn't necessarily easy to implement, the GCEC adds, since what's good for the economy isn't always good for vested interests. One of the report's ideas, for example, is that countries stop subsidizing fossil fuels, whose $600 billion in annual subsidies dwarf the $100 billion for renewable energy. Building more compact cities with mass transit instead of new highways could also save $3 trillion in investment costs over the next 15 years, according to the report, while restoring just 12 percent of degraded lands could feed 200 million extra people and raise farmers' incomes by $40 billion a year.

Sweeping changes like these can seem daunting, especially amid the diplomatic thicket of U.N. climate talks. But as Calderón pointed out in a press conference, the affordability of fighting climate change is a limited-time offer. "If we don't take action in these coming years, it will be every day more expensive and more difficult to shift toward a low carbon economy," he said. "If we are going to invest $90 trillion one way or another, let's do it in the right way."