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Steer-ing the Climate Conversation to Sanity Regarding Economic Analysis

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Monday evening, PBS' Newshour hosted a segment on climate change issues building on Secretary of State John Kerry's strong comments over the weekend equating climate change with weapons of mass destruction.

The science of climate change is leaping out at us like a scene from a 3-D movie... Terrorism, epidemics, poverty, the proliferation of weapons of mass destruction, all challenges that know no borders. The reality is that climate change ranks right up there with every single one of them.

Secretary Kerry called on citizens -- worldwide -- to call on leadership to lead on climate change.

Secretary Kerry also commented about disinformation, including disinformation about cost-benefit analysis related to climate change mitigation:

We shouldn't allow a tiny minoricassty of shoddy scientists and science and extreme ideologues to compete with scientific fact, nor should we allow any room for those who think that the costs associated with doing the right thing outweigh the benefits. There are people who say, "Oh, it's too expensive, we can't do this." No. No, folks.

Secretary Kerry continued to highlight that the costs of inaction are too high:

President Obama and I believe very deeply that we do not have time for a meeting anywhere of the Flat Earth Society. One of the arguments that we do hear is that it's going to be too expensive to be able to address climate change. I have to tell you, that assertion could not be less grounded in fact. In fact, it's exactly the opposite. Serious analysts understand that the costs of doing nothing far outweigh the costs of investing in solutions now. You do not need a degree in economics or a graduate degree in business in order to understand that the cost of flooding, the cost of drought, the cost of famine, the cost of health care, the cost of addressing this challenge is simply far less - the costs of addressing this challenge are far less than the costs of doing nothing. Just look at the most recent analysis done by the World Bank, which estimates that by 2050, losses - excuse me one second - losses from flood damage in Asian ports - fishing ports, shipping ports - the losses in those ports alone could exceed $1 trillion annually unless we make big changes to the infrastructure of those ports.

Sadly, the Secretary's comments suggest that there is a minority who believe that climate mitigation costs outweigh the benefits: that is actually the mainstream perspective.  The 'mainstream,' however, is sadly horribly wrong due to not just disinformation from those opposing action and denying basic science (for whatever set of reasons) but more fundamentally due to the difficulty of assessing 'wicked problems.'

Secretary Kerry also solely discussed the issue in terms of avoiding costs of damaging climate change (an insurance value) as opposed to discussing the direct benefits from action. Analysis that doesn't stove-pipe issues -- that forthrightly seeks to tackle the 'wicked problem' -- would reveal that the benefits of climate mitigation and adaptation action (massively) outweigh costs -- e.g., a set of investments that will provide massive returns.

With these points in mind, within the PBS discussion as to "can the United States compel action on climate change," World Resources Institute's (WRIAndrew Steer snuck in a point that merits emphasis:

Most people look at the challenge of climate change and they think, my goodness, it's going to be costly.

Well, it turns out that, just as the science is firming up, so too the economics is firming up.

It turns out that if we do it right, we can have a transition to a low carbon future that actually has more jobs, more technology and actually benefits people.

This is a critical point: Our economic system will be more fruitful (in the near, mid and long-term) for all [1] if we pursue a low-carbon future due to better job creation, better living standards, better health, better education, better... and, oh by the way, reduced risk from catastrophic climate chaos.

Sadly, the global discussion is dominated by "it will cost to take action to mitigate climate change" rather that assessing, embracing and educating the truth that smart mitigation policies will strengthen economies while reducing climate change risks and costs.

Steer went on to highlight that the Global Commission on the Economy and Climate (WRI is one of the member institutions) is seeking to help change this general understanding.

The New Climate Economy project, bringing together some of the world's foremost economic experts to examine how stronger economic performance can be supported by good climate policy. The project aims to contribute to the global debate about economic policy, and to inform government, business and investment decisions.

Said Commission Chair and former President of Mexico Felipe Calderón:

Climate impacts are rising and the evidence of warming is increasingly clear, but most economic analysis still does not properly factor in the increasing risks of climate change or the potential benefits of acting on it. We need urgently to identify how we can achieve economic growth and job creation while also reducing emissions and tackling climate change.

Lord Nicholas Stern, Vice-Chair of the Commission and author of the 2006 Stern Review said:

At a time when governments throughout the world are struggling to boost growth, increase access to energy and improve food security, it is essential that the full costs and benefits of climate policies are more clearly understood. It cannot be a case of either achieving growth or tackling global warming. It must be both.

While there are those who strongly dismiss the potential for "green capitalism" [2], a fundamental truth is that sensible climate mitigation policy offers the potential for accommodating improved human living conditions (improved economic performance) while offering a potential for avoiding utter catastrophic climate chaos.

Secretary Kerry -- and others who understand the critical need for climate mitigation policy and investments -- would be well served to pay attention to The New Climate Economy Project.

NOTES:

[1] Of course, "all" is not a fully true term.  Those heavily invested in fossil fuel (foolish foolish) endeavors will not necessarily see the economic benefits that the vast majority of humanity and economies will reap from sensible climate policy.  However, we should explicitly recognize that these businesses, individuals, institutions, nations, etc. are privatizing profits (to themselves) while socializing costs (pollution costs -- health, climate, etc...) to all.

[2] For an in depth discussion -- bringing economics and environmentalism -- of the challenges of "economic growth" within the fixed constraints of the world's carrying capacity, see Brian Czech, Supply Shock:  Economic Growth at the Crossroads and the Steady State Solution.  Czech directs the Center for the Advancement of the Steady State Economy CASSE. An interesting counterpoint, which should challenge anyone with an open mind, is Ramez Naam, the infinite resource: the power of ideas on a finite planet.

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