The cost estimates vary widely. A recent study found that warming to 2 degrees Celsius would require a total investment of between $ 4 trillion and $ 60 trillion with a median estimate of $ 16 trillion, while warming to 1.5 degrees Celsius would require between 10 trillion and Could cost $ 100 trillion, median estimate of $ 30 trillion. (As a reference, the total global economy was $ 88 trillion in 2019.) Other studies have found that reaching net zero requires annual investments ranging from less than 1.5 percent of global gross domestic product up to 4 percent is enough. That’s a lot, but in the area of historic energy investments in countries like the United States
Now let’s look at the cost of uncontrolled climate change, which will be the toughest for the most vulnerable. These include property and infrastructure damage from sea level rise and extreme weather, death and disease related to natural disasters, pollution and infectious diseases, decreased agricultural yields and lost labor productivity due to rising temperatures, decreased water availability and increased energy costs, species extinction and habitat destruction. Dr. Hsiang, the UC Berkeley economist, describes it as “death by a thousand cuts”.
Climate damage is therefore difficult to quantify. Moody’s Analytics estimates that as much as 2 degrees Celsius warming will cost the world $ 69 trillion by 2100, and economists expect the toll to continue to rise with temperature. In a recent survey, economists estimated the cost would be 5 percent of global GDP at 3 degrees Celsius warming (our current strategy) and 10 percent at 5 degrees Celsius. Other research shows that global GDP per capita will decline between 7 and 23 percent by the end of the century if current warming trends continue – an economic blow that equates to several coronavirus pandemics each year. And some fear that these are huge underestimates.
Studies already suggest that climate change has reduced incomes in the poorest countries by up to 30 percent and reduced global agricultural productivity by 21 percent since 1961. Extreme weather events have also caused a big bill. In the United States alone, climate-related disasters such as hurricanes, droughts, and forest fires caused nearly $ 100 billion in damage to businesses, property, and infrastructure in 2020, compared to an average of $ 18 billion a year in the 1980s.
Given the high price of inaction, many economists say tackling climate change is better business. It’s like that old adage, an ounce of prevention is worth a pound of cure. In this case, limiting warming will significantly reduce the future damage and inequalities caused by climate change. It will also bring so-called co-benefits, such as saving a million lives a year by reducing air pollution and millions more through healthier, climate-friendly diets. Some studies even find that meeting the goals of the Paris Agreement could create jobs and increase global GDP. And of course, mitigating climate change will spare many species and ecosystems that humans depend on – and that many humans believe have their own innate worth.
The challenge is that we need to reduce emissions now to avoid damage later, which will require major investments over the next few decades. And the longer we are late, the more we will pay to meet the Paris goals. A recent analysis found that reaching net zero by 2050 would cost the US almost twice as much if we waited until 2030 instead of acting now. But even if we miss the Paris target, the economy is still a strong argument for climate action, because every additional warming costs us more – in dollars and in life.
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Veronica Penney contributed to the coverage.
Illustration photos by Esther Horvath, Max Whittaker, David Maurice Smith, and Talia Herman for the New York Times; Esther Horvath / Alfred Wegener Institute