Climate Change Ain’t Gonna Be As Bad As They Say
THERE are three important questions about climate change: is it happening, is it us causing it and how bad is it going to be? It’s the answers to those three that determine what, if anything, we should try to do about it. My answers to those three have been yes, yes, and maybe not as bad as people think for some time now. It appears that I might even have been right as well:
It puts the overall cost at less than 2% of GDP for a 2.5 degrees Centigrade (or 4.5 degrees Fahrenheit) temperature increase during this century. This is vastly less than the much heralded prediction of Lord Stern, who said climate change would cost 5%-20% of world GDP in his influential 2006 report for the British government.
That is a rather large change, isn’t it? And we need to also put that into context against what Stern said we should be spending now. Which is that we should be willing to spend 1-2% of GDP a year now to avoid that possible 20% loss. You can agree or not agree, as you wish, with that plan. But it’s obviously very different from spending 1 or 2% of GDP for a century to then avoid a 2% fall in GDP.
There is, of course, no certainty in any of this so one single calculation isn’t going to be enough to change all of our plans. But we almost certainly should be starting to think about scaling back the plans and the spending we’re currently undertaking.