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Stronger action on climate change would benefit the economy, study finds

Debunking common myths about climate change
Debunking common myths about climate change 07:07

One of the main arguments against taking action on climate change has always been that it's too expensive. But new research finds just the opposite: We can't afford not to. 

A study published Tuesday in the peer-reviewed scientific journal Nature finds that if nations fail to rein in greenhouse gas emissions sufficiently, as agreed upon in the international Paris Agreement, the global economy stands to lose at least $150 trillion to as much as $792 trillion by the end of the century. 

A co-author of the study, Biying Yu, from the Beijing Institute of Technology, said the general consensus in the international academic community is that "climate change may lead to a global catastrophe," and thus inaction could result in "substantial socio-economic losses."

The goal of the Paris Agreement is to keep global warming below 2 degrees Celsius as compared to pre-industrial levels (the world has already warmed by more than 1 degree). The U.S. signed onto the accord in 2015 along with more than 190 other nations, but the Trump administration later announced plans to withdraw

The Paris Agreement is made up of voluntary commitments known as Nationally Determined Contributions, or NDCs, made by each nation. The main aspect of the commitments is to reduce greenhouse emissions by cutting the burning of fossil fuels, thus reducing global warming and the adverse impacts of warming. In other words, the less the globe warms, the less the economic damage. 

Despite these goals, most countries are falling short of their commitments and Yu said countries need to update their goals. "A number of studies have proved that current [NDCs] are not enough to achieve the global warming targets," Yu said. 

Analysis by the Climate Action Tracker, a consortium of research groups, shows that even if all the nations' commitments in the agreement are realized, it is likely the globe would still warm by 3 degrees Celsius. With this in mind, Yu and her team calculated optimal strategies to help countries improve their NDCs, minimize economic losses and maximize gains. They did this by simulating a global cooperation strategy designed to obtain the optimal trajectory of emissions reductions. 

The research reveals that the choice between climate action and economic growth is in fact a false choice. The authors' work concludes that countries could reach their climate goals and at the same time see an increase in their net income. 

Specifically the team found that if nations are able to optimally reduce heat-trapping greenhouse gas emissions, then the net global economic benefit would range between $127 trillion and $616 trillion by 2100.

The net economic benefit is defined as the climate damage avoided minus the costs to keep warming in check. The large range in economic benefit values is due to simulating various "self-preservation strategies" — plans for avoiding loss and maximizing gain — that incorporate different levels of technology development and climate damage.
For each nation, the study provides exact emission reduction targets, economic break-even points and the ceiling costs of strategies to improve their current NDC's. Yu says the goal of their study is to illustrate to leaders the potential payoffs of taking early and significant action.
Noah Kaufman, a climate and energy economist from Columbia University, agrees that aggressive action would be beneficial to both the Earth and the economy. "The literature overwhelmingly shows the economic benefits of serious mitigation efforts exceed the costs in the long run," he said.
However, despite evidence of substantial long-term economic gains, Biying Yu is concerned that governments may be shortsighted about the up-front costs. "Since many countries and regions would have a negative net income in the early stage due to the large amount of [greenhouse gas] abatement cost, they may refuse to ratchet up current climate actions in the near term and choose to neglect the long-term climate damage, which makes a severe obstacle in achieving global warming targets."

Kaufman believes it's not for lack of knowledge or ability that countries haven't taken stronger action. "We could implement highly cost-effective mitigation policies that would reduce emissions at a very low cost. But we've lacked the political will to do so," he said. 

"Combating climate change is not a matter for one country. It requires collective action and cooperation from all countries around the world," explained Yu, "Let's work together and save ourselves."

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