The Economics of Global Warming

Those who don’t outright deny the existence of human-caused global warming often argue we can’t or shouldn’t do anything about it because it would be too costly. Take Prime Minister Stephen Harper, who recently said, “No matter what they say, no country is going to take actions that are going to deliberately destroy jobs and growth in their country.”

Those who fear or reject change are running out of excuses as humanity runs out of time. Photo credit: Shutterstock

But in failing to act on global warming, many leaders are putting jobs and economic prosperity at risk, according to recent studies. It’s suicidal, both economically and literally, to focus on the fossil fuel industry’s limited, short-term economic benefits at the expense of long-term prosperity, human health and the natural systems, plants and animals that make our well-being and survival possible. Those who refuse to take climate change seriously are subjecting us to enormous economic risks and foregoing the numerous benefits that solutions would bring.
The World Bank—hardly a radical organization—is behind one study. While still viewing the problem and solutions through the lens of outmoded economic thinking, its report demolishes arguments made by the likes of Stephen Harper.
“Climate change poses a severe risk to global economic stability,” said World Bank Group president Jim Yong Kim in a news release, adding, “We believe it’s possible to reduce emissions and deliver jobs and economic opportunity, while also cutting health care and energy costs.”
Risky Business, a report by prominent U.S. Republicans and Democrats, concludes, “The U.S. economy faces significant risks from unmitigated climate change,” especially in coastal regions and agricultural areas.
We’re making the same mistake with climate change we made leading to the economic meltdown of 2008, according to Henry Paulson, who served as treasury secretary under George W. Bush and sponsored the U.S. bipartisan report with former hedge fund executive Tom Steyer and former New York mayor Michael Bloomberg. “But climate change is a more intractable problem,” he argued in the New York Times. “That means the decisions we’re making today—to continue along a path that’s almost entirely carbon-dependent—are locking us in for long-term consequences that we will not be able to change but only adapt to, at enormous cost.”