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Simply put, the economic analysis related to climate change issues used in public debates has systematically gotten things wrong. The very nature of the analytical process fosters an exaggerated projection of costs and an understatement of benefits from climate mitigation and adaptation investments. This fosters a discussion of the "costs" of action, rather than a more honest and meaningful discussion of the extent and nature of the "climate mitigation return on investment."  Fully-burdened cost-benefit analysis would highlight the huge return to be secured from sensible climate investments.

When it comes to cost-benefit analysis, two just released reports shed important perspective on this issue:

  • Risky Business documents the costs the United States is already accruing due to climate change impacts and projects these costs through the century.  Costs could include over $500 billion of coastal property below sea level by 2100, outdoor labor productivity declines of over three percent, agricultural production losses that could -- in some regions -- exceed 50 percent, etc ... Writ large, $trillions at risk in the US economy from unchecked climate change.
  • The World Bank's Climate-Smart Development: Adding Up the Benefits of Actions that Help Build Prosperity, End Poverty and Combat Climate Change examined six nations and the European Union through the lens of what would be smart choices for climate mitigation / adaptation and what would the economic impact be from these?  The answer:  a potential $2.6 trillion, per year, improvement to the global economy.

These reports, together, provide window on a simple truth:

When it comes to climate change, Inaction costs (a lot) ... Action benefits (a lot)

Read below the fold for more analysis.

NOTE: While the "2100" figure is above, let us be clear—the costs are already occurring and benefits from smart climate mitigation/adaptation investments will be immediate.  See here for some discussion.

Below are some of the material from the press release/executive summaries of the two reports. I have not had a chance to seriously review either report although will strive to do so in the coming days/weeks. A quick impression:

  • The Risky Business report fails to provide easy top-line summary of impacts (wow, 3% decline in worker productivity outdoors ... that will be 'ho-hum' to elite decision-makers who don't have a clue what it means to be working outdoors in 100F temperatures) while the World Bank's "$2.6 Trillion / Year Benefit From Climate Action" is easy to get in a headline.
  • Also, it is frustrating that the Risky Business report executive summary has so much discussion of 2100 -- rather focus on today with reinforcing about how much worse it gets without investment.

In any event, as this diary focuses, these reports provide an important bookending to reinforce the truth that every day of in(adequate)action increases costs and investments in climate mitigation/adaptation will provide great returns.

Risky Business, as a reminder, is the Steyer/Bloomberg/Paulsen effort to highlight U.S. business costs from climate change.  Here are key findings:

key findings underscore the reality that if we stay on our current emissions path, our climate risks will multiply and accumulate as the decades tick by. These risks include:

Large-scale losses of coastal property and infrastructure

  • If we continue on our current path, by 2050 between $66 billion and $106 billion worth of existing coastal property will likely be below sea level nationwide, with $238 billion to $507 billion worth of property below sea level by 2100.
  • There is a 1-in-20 chance—about the same chance as an American developing colon cancer; twice as likely as an American developing melanoma —that by the end of this century, more than $701 billion worth of existing coastal property will be below mean sea levels, with more than $730 billion of additional property at risk during high tide. By the same measure of probability, average annual losses from hurricanes and other coastal storms along the Eastern Seaboard and the Gulf of Mexico will grow by more than $42 billion due to sea level rise alone. Potential changes in hurricane activity could raise this figure to $108 billion.
  • Property losses from sea level rise are concentrated in specific regions of the U.S., especially on the Southeast and Atlantic coasts, where the rise is higher and the losses far greater than the national average.
Extreme heat across the nation—especially in the Southwest, Southeast, and Upper Midwest—threatening labor productivity, human health, and energy systems
  • By the middle of this century, the average American will likely see 27 to 50 days over 95°F each year—two to more than three times the average annual number of 95°F days we’ve seen over the past 30 years. By the end of this century, this number will likely reach 45 to 96 days over 95°F each year on average.
  • As with sea level rise, these national averages mask regional extremes, especially in the Southwest, Southeast, and upper Midwest, which will likely see several months of 95°F days each year.
  • Labor productivity of outdoor workers, such as those working in construction, utility maintenance, landscaping, and agriculture, could be reduced by as much as 3%, particularly in the Southeast. For context, labor productivity across the entire U.S. labor force declined about 1.5% during the famous “productivity slowdown” in the 1970s.
  • Over the longer term, during portions of the year, extreme heat could surpass the threshold at which the human body can no longer maintain a normal core temperature without air conditioning, which we measure using a “Humid Heat Stroke Index” (HHSI). During these periods, anyone whose job requires them to work outdoors, as well as anyone lacking  access to air conditioning, will face severe health risks and potential death.
  • Demand for electricity for air conditioning will surge in those parts of the country facing the most extreme temperature increases, straining regional generation and transmission capacity and driving up costs for consumers.
Shifting agricultural patterns and crop yields, with likely gains for Northern farmers offset by losses in the Midwest and South
  • As extreme heat spreads across the middle of the country by the end of the century, some states in the Southeast, lower Great Plains, and Midwest risk up to a 50% to 70% loss in average annual crop yields (corn, soy, cotton, and wheat), absent agricultural adaptation.
  • At the same time, warmer temperatures and carbon fertilization may improve agricultural productivity and crop yields in the upper Great Plains and other northern states.
  • Food systems are resilient at a national and global level, and agricultural producers have proven themselves extremely able to adapt to changing climate conditions. These shifts, however, still carry risks for the individual farming communities most vulnerable to projected climatic changes.
Paulsen's statement (other statements)
World Bank
sector policies include regulations, taxes, and incentives to stimulate a shift to clean transportation, improved industrial energy efficiency, and more energy efficient buildings and appliances.

By 2030, the benefits of these three sets of sector policies would include 94,000 premature deaths avoided annually and GDP growth of $1.8 trillion-$2.6 trillion per year. The policies would avoid 8.5 gigatons of CO2-equivalent and almost 16 billion kilowatt-hours of energy saved, roughly equivalent to taking 2 billion cars off the road. Together, these implementing these policies could represent about 30 percent of the total reduction needed in 2030 to limit global warming to 2 degrees Celsius.

The four simulated project case studies analyzed local development interventions scaled up to a national level in one country.

For example, in the Brazil landfill scenario, the report uses results from existing World Bank-supported projects in Brazil that are implementing a variety of integrated solid waste management options, including biodigesters, composting, and landfill technology that captures methane to produce electricity. If the same technologies were scaled up nationwide, over 20 years, the study estimates the changes could create more than 44,000 jobs, increase GDP by more than $13 billion, and reduce emissions by 158 million tons of CO2-equivalent.

The other three project case studies examine expanding bus rapid transit in India, the use of clean cookstoves in rural China, and the use of solar panels and biodigesters to produce electricity from agriculture waste in Mexico.

Together, the aggregate benefits over 20 years of those four projects scaled up to the national level are estimated to include more than 1 million lives saved and about 1 million-1.5 million tons of crop losses avoided. These projects could reduce CO2-equivalent, emissions roughly equivalent to shutting down 100-150 coal-fired power plants. For just three of these projects – in India, Brazil, and Mexico – the benefits equate to about $100 billion-$134 billion in additional value.

Originally posted to Climate Change SOS on Tue Jun 24, 2014 at 06:31 AM PDT.

Also republished by DK GreenRoots and Daily Kos.

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Comment Preferences

  •  IMHO, you're doing it wrong. (5+ / 0-)

    Our decision makers could care less about 2100, or even 2050.  To get them to care, you have to NPV the numbers back to right now.

  •  It's only a real market if all costs are counted (19+ / 0-)

    It's actually pretty amazing how well renewables and energy efficiency efforts are doing - considering how tilted the deck is in favor of polluting for free.

    •  Our politicians think like corporations now (3+ / 0-)
      Recommended by:
      jfromga, elwior, hooper

      because that's where they get their money.  And costs that far in the future are damn near meaningless to corporations.

    •  But it has taken more than 30 years... (9+ / 0-)

      ...for them to break out, something they could have done a long time ago had the deck not been so tilted not just for the fossil-fuel foolers but against renewables in public sector budgets.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Tue Jun 24, 2014 at 09:51:06 AM PDT

      [ Parent ]

      •  So true, MB. 25 years ago, I proposed to the (5+ / 0-)

        county (Orange County, CA) that they begin the process of requiring solar pool heating then moving to solar rooftops. Everyone yawned. They did nothing.

        Meanwhile, tens of thousands of (generally large) homes were built requiring expensive power upgrades in an area that gets pretty damned warm.

        We still don't have a requirement for this after all these years. Incredibly stupid when installing good units during the original build makes more sense than retrofitting.

        Land planners need to get their heads out of their rears and start doing something proactive. Given CEQA now requires assessment of contributions to global warming, this would be a great opportunity to mitigate against continued increases in CO2 production (read burning coal to create electricity) and the costs would be spread over the average mortgage, probably generally 30 years for most and would transfer with sale as it is not an after market lease etc.

        ANYTHING and everything should be done to help out. The BIA (Building Industry of America) is a very, very powerful lobby at the local level and because of that we are stuck in this circular pattern of hovering over the problem (for decades) while it gets worse.

        The only hawk I like is the kind that has feathers. My birding blogs: http://thisskysings.wordpress.com/ and canyonbirds.net

        by cany on Tue Jun 24, 2014 at 10:09:32 AM PDT

        [ Parent ]

  •  Governments Represent Markets Not Societies (2+ / 0-)
    Recommended by:
    A Siegel, elwior

    --especially our government. Analyses like those reported here lead to little action because they address institutions such as the people which aren't major forces in society.

    What we need to do is to study climate change in relation to powerful sectors, those that put representatives into government both as elected officials and as lobbyists --and that would be those sectors that aren't intrinsically tied to fossil carbon energy.

    Insurance is one obvious target, but we must be prepared to try to cut it off from its natural response to economic threat: taxpayer backstopping and bailouts allowing it to continue business as usual.

    Construction would be another important sector harmed by climate change. Transportation will be seriously impacted but obviously there is huge growth and therefore investment potential if we move toward building more sustainable modes and networks. Many existing businesses need merely adapt, it's not necessary to decimate them as it is dirty carbon businesses.

    I see little value of elaborate studies and reporting aimed at "society" beyond entertainment. Voters don't have a fraction of the power to drive government action that is both adequate and immediate enough. Our heavy hitting should be aimed at those forces that do. Citizen education is probably most useful in building consumer rather than voter sentiment, given the profoundly short time horizons coming at us.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Jun 24, 2014 at 07:51:01 AM PDT

    •  We disagree re value ... (6+ / 0-)

      For me, as per the first link in the diary, there is a real power for framing the discussion.  In 2009, proponents of Waxman-Markey were celebratory when a GAO report concluded that 'it would only cost a postage stamp a day" to do climate mitigation.  The entire 'debate' was over relative cost which meant people heard COST.

       That analysis, however, was seriously flawed -- with massively understated benefit stream analysis -- to the tune of flipping postage stamp/day of cost into FEDEX package ($10s of dollars) of benefit per day.  

      Would the public debate have been (slightly?) different if the proponents had been talking "$10,000 / year benefit for average household" while opponents were claiming "$3000/year cost"?   I think so.

      Agree, however, that there is a real power in targeting the analysis in a way to maximize impact on powerful sectors who are (nearly) ready to seriously weigh in on the discussion. We are seeing this, increasingly, with the insurance sector -- and I expect to see even more in the years to come.

      Blogging regularly at Get Energy Smart NOW! for a sustainable energy future.

      by A Siegel on Tue Jun 24, 2014 at 07:59:22 AM PDT

      [ Parent ]

    •  How exactly do we take aim, in your view? n/t (0+ / 0-)

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Tue Jun 24, 2014 at 09:53:41 AM PDT

      [ Parent ]

    •  The point of these studies is that they deal with (1+ / 0-)
      Recommended by:
      A Siegel

      real money. Although the Bircher Koch brothers regard renewable power as Stalinism (I'm not the one making that up) nearly everybody in the electricity business actually wants to use the least expensive sources to make the most money. Apart from the Wall Street Journal Editorial Board, the entire financial press has recognized that we are partway through the Grid Parity transition, where renewables cost less than coal in more and more of the country and the world.

      Although the installed base of renewables is still small, the rate of construction is relatively high, while construction of coal-fired power plants is in steep decline, and we are well launched on shutting coal-fired plants, or at least converting them to natural gas, which radically cuts down on mercury, sulfur, and nitrogen oxide emissions in addition to cutting carbon. (We still have to deal with methane emissions from gas wells, since methane is a much more potent greenhouse gas than carbon dioxide.)

      Back off, man. I'm a logician.—GOPBusters™

      by Mokurai on Tue Jun 24, 2014 at 06:21:36 PM PDT

      [ Parent ]

  •  Knee Jerk Conservative Reaction (4+ / 0-)
    Recommended by:
    James Wells, A Siegel, TomP, Yonit

    Scientific American has a good summary of the Risky Business manifesto. They also illustrate the unthinking response to it from the usual suspects.

    Critics of the Risky Business project, however, said they were concerned it would be used to advocate for expensive fixes.

    The report is likely to "raise alarm bells," said Chris Neefus, spokesman for Americans for Prosperity, a conservative advocacy group linked to energy barons Charles and David Koch.

    "Generally, we find that on the heels of something like this, that folks are looking to raise taxes," either directly through a carbon tax or by rule changes that raise power prices, Neefus said.

    It's all about taxes with these people. The richest people on the planet are willing to let the planet cook rather than pay anything in taxes to save it. Facts, logic, sense - doesn't matter to them.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Tue Jun 24, 2014 at 09:32:47 AM PDT

  •  I'm already seeing it here in DFW - (2+ / 0-)
    Recommended by:
    TomP, A Siegel

    We had a number of freezes in 2014, and with roads already needing repair, the water gets into the cracks, freezes, and then we have even more repairs to make. I was trying to drive east on I-30 on Sunday, and they're right in the middle of resurfacing it. Between the actual holes in the road, the cracks, and the uneven surface of the asphalt, it's a wonder we made it.

    I see you drivin' 'round town with the girl I love / And I'm like / Please proceed, Governor. - Dave Itzkoff

    by Jensequitur on Tue Jun 24, 2014 at 04:22:54 PM PDT

  •  More (2+ / 0-)
    Recommended by:
    TomP, A Siegel
    'Risky Business' a Bipartisan Report on "the Economic Risks of Climate Change" warns of huge costs

    A future where just going outside will become much riskier in much of the country due to the increased heat and humidity, while other areas of our coasts will be under water should be enough to get the attention of leaders across a variety of fields.  

       
                                                     South Florida

    "The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations." ~ Thomas Jefferson

    by Lefty Coaster on Tue Jun 24, 2014 at 04:27:21 PM PDT

  •  Saw this on Bloomberg news. (1+ / 0-)
    Recommended by:
    A Siegel

    It's good that not carbon business is beginning to notice.

    Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

    by TomP on Tue Jun 24, 2014 at 04:33:17 PM PDT

  •  I would love to ask him just one question... (1+ / 0-)
    Recommended by:
    A Siegel

    Where the hell was this when he was in office, could change things or maybe influence people who could change things. I've seen this disappointment so many times with the marijuana issue--people who grow a pair after they get out of office. I'm not impressed one bit. In fact, it makes me dislike him even more because it tells me HE KNEW BETTER!

  •  Henry Pauslon (0+ / 0-)

    I cannot think of a worse advocate to be quoting.

    "Americans have a strong devotion to afflicting the afflicted and comforting the comfortable. They have a hard time contemplating any meaningful overhaul of the rules of their political system" -- Alec Baldwin

    by Sagebrush Bob on Tue Jun 24, 2014 at 04:49:33 PM PDT

    •  Chose him as 'atypical' (0+ / 0-)

      Steyer:

      “Climate change is nature’s way of charging us compound interest for doing the wrong thing,” said Tom Steyer. “The Risky Business report confirms what many of us have long suspected: The longer we wait to address the growing risks of climate change, the more it will cost us all. From a business perspective, given the many benefits of early action, it would be silly to allow these risks to accumulate to the point where we can no longer manage them
      Cisneros:
      “Developers, builders and community leaders must be cognizant of the implications of climate change. We’re all going to have to confront the risks we face from sea level rise, storm surge, and extreme heat. Many properties may become uninsurable due to rising ocean levels and the risk of inundation; many more will face tough choices about whether to rebuild or relocate. And many industries that rely on outdoor labor will need to think hard about how to minimize the risk that extreme heat poses to their workers. Risky Business provides us with a framework that helps us take the first step.”
      Etc ...

      In any event, Paulsen speaks to moneyed Wall Street -- not Main Street.

      Blogging regularly at Get Energy Smart NOW! for a sustainable energy future.

      by A Siegel on Tue Jun 24, 2014 at 05:49:41 PM PDT

      [ Parent ]

  •  What we don't seem to fathom is that (2+ / 0-)
    Recommended by:
    A Siegel, yet another liberal

    CO2 buildup in the atmosphere is permanent, for all practical purposes. I takes tens of thousands of years for the carbon we spew into the atmosphere to become sequestered.

    Just reducing CO2 emissions is not enough. We gotta leave the coal, the oil, and even the natural gas in the ground. Every ton of CO2 in the atmosphere will remain there for centuries, contributing to climate change. We cannot just stop emitting CO2 and go back to what it was like a century ago. A warmer Earth is already baked in (pun intended) to our future. We have already damaged the planet's ability to support human life. Our job today is to stop making things worse.

    Primo pro nummata vini [First of all it is to the wine-merchant] (-7.25, -6.21)

    by Tim DeLaney on Tue Jun 24, 2014 at 05:05:34 PM PDT

    •  We need to get to carbon negative ... (1+ / 0-)
      Recommended by:
      Tim DeLaney

      economy -- ASAP -- and hopefully in a way that is improving quality of life.

      Blogging regularly at Get Energy Smart NOW! for a sustainable energy future.

      by A Siegel on Tue Jun 24, 2014 at 05:50:27 PM PDT

      [ Parent ]

    •  From something written years ago ... (2+ / 0-)
      Recommended by:
      Tim DeLaney, Calamity Jean
      Objective 2050:  A Prosperous, Climate-Friendly Society.

      What does this mean? Let us parse the phrase:

      Objective:  a target to strive for, the optimum, something that is achievable, even though we need to work hard to get there.

      2050:  The mid-century, emphasizes that this is long term, an objective that requires concerted, continued effort, for generations to come.

      Prosperous: that the opportunity will be there for achieving “the American Dream” — an opportunity available to all.  Prosperity — we will be richer if we turn away from today’s heavily-pulluting and wasteful energy habits. Prosperity — in health, financial, security terms.

      Climate-Friendly: Greenhouse Gas (GHG)/Carbon neutral, preferable even carbon negative, figuring out ways to actually removed carbon from the atmosphere in meaningful amounts to seek to restore ‘natural’ levels of variation to turn the clock back on Global Warming, to foster global remediation of the damage we have caused.  This is an objective — a stretch goal — that would provide the path more likely to avoid utter climate catastrophe than some X% target. Also, well, 100% is easier to explain than 90% — it is time to remove humanity’s pollution above ‘background’/natural levels. It is possible to see a path there and to follow it.

      Society: This is greater than “economy” and, well, this is greater than any single nation.  

      A Prosperous and Climate-Friendly Society …

      A world and vision to fight for …

      Blogging regularly at Get Energy Smart NOW! for a sustainable energy future.

      by A Siegel on Tue Jun 24, 2014 at 05:56:07 PM PDT

      [ Parent ]

    •  Biochar!! (0+ / 0-)

      Fast-growing biomass (switchgrass, etc.?) to absorb CO2 from the atmosphere, plus retorts to pyrolyze the biomass into heat, manufactured gas, generated electricity, and biochar for soil improvement and long-term carbon sequestration.

      How 'bout that?

      "Push the button, Max!" Jack Lemmon as Professor Fate, The Great Race

      by bartcopfan on Thu Jun 26, 2014 at 07:54:34 AM PDT

      [ Parent ]

  •  paulson is a swine (0+ / 0-)

    he was on npr crowing about being a "proud republican" and claiming there was basically no difference between the two parties on climate change...IOW, fuck him

  •  maybe now some of the stubborn ones will listen (1+ / 0-)
    Recommended by:
    A Siegel

    it will cost them $$$$$$$$$$$$

    An idea is not responsible for who happens to be carrying it at the moment. It stands or falls on its own merits.

    by don mikulecky on Tue Jun 24, 2014 at 05:49:55 PM PDT

  •  Here's the thing... (2+ / 0-)
    Recommended by:
    PH099, Calamity Jean

    I've been listening to this story go around and reading it on several sites (including here). NPR had Mr. Paulson on talking up his latest snake-oil.

    Am I being too cynical for thinking that this latest waste of paper, airwaves and bandwidth is now out there for the ages because these know-nothing-know-it-alls have their financial ducks in a row now so as to better profit off of what they had been adamantly denying for most of their lives?

    Now that there's a dollar to be made, human impact climate change is more real and bigger than God, Jesus, Elvis and the Beatles all put together. So we better pay attention!

    What is it with these people? We have the former cyborg-vice-president allowed on the air for way too long past his expiration date. Now, this money-grubbing former cabinet member is on stage to tell us that now - now not then, or earlier or when we had a chance to mitigate it - that climate change is actually a threat [read: real threat to their $$$].

    At this point, should we really care what these republican operatives say? I'd like to think there was a time when people who were so consistently wrong, so untruthful, so hypocritical, and just plain so selfishly stupid were told to sit down, to shut up, and that if their opinions were wanted, someone might ask for them.

    I don't think much of America is actually asking for the opinions of Paulson & Co. at this point. We'll solve this epic problem without his concern-trolling for the sake of his friends' money.  

  •  Carbon bubble is the problem The valuations of ... (3+ / 0-)
    Recommended by:
    A Siegel, PH099, Calamity Jean

    Carbon bubble is the problem

    The valuations of fossil fuel companies are based primarily on proven reserves and daily production. Serious efforts at addressing climate change turn valuable reserves into stranded assets. If that happens, their valuations will drop like rocks. The most profitable businesses in the history of profits are fighting that with every dollar of speech they have.

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