Sign Us Up: Trillions to Fight Global Warming 'Relatively Small Fraction' of Total Economic Output
Wednesday's front-page story by environmental-beat reporter John Broder has a surprisingly tough headline: "Climate Deal Likely to Bear Big Price Tag." How big? Trillions of dollars.
But wait, in context, it's actually not so bad, merely "a relatively small fraction of the world's total economic output."
I feel better about it already.
If negotiators reach an accord at the climate talks in Copenhagen it will entail profound shifts in energy production, dislocations in how and where people live, sweeping changes in agriculture and forestry and the creation of complex new markets in global warming pollution credits.
So what is all this going to cost?
The short answer is trillions of dollars over the next few decades. It is a significant sum but a relatively small fraction of the world's total economic output. In energy infrastructure alone, the transformational ambitions that delegates to the United Nations climate change conference are expected to set in the coming days will cost more than $10 trillion in additional investment from 2010 to 2030, according to a new estimate from the International Energy Agency.
As scary as that number sounds, the agency said that the costs would ramp up relatively slowly and be largely offset by economic benefits in new jobs, improved lives, more secure energy supplies and a reduced danger of climate catastrophe. Most of the investment will come from private rather than public funds, the agency contends.
"People often ask about the costs," said Kevin Parker, the global head of Deutsche Bank Asset Management, who tracks climate policy for the bank. "But the figures people tend to cite don't take into account conservation and efficiency measures that are easily available. And they don't look at the cost of inaction, which is the extinction of the human race. Period."
Whatever global warming's effects - and most scientific projections are less dire - there are also varying estimates of the economic costs of failing to act to address the problem soon, some of them very high.
Broder is quite ready to accept "dire" predictions of harmful climate change.