What Will Climate Change Cost Us?

“Taking the steps necessary to address global warming will slow down our economic growth.” We’ve all heard a version of that one, right? As it turns out, not only will addressing climate change produce a minimal drag on the economy, but doing nothing could be much more expensive. The BBC (via the Daily Grist) reports that a newly-released study by British economist Sir Nicholas Stern shows that failing to act against the climate crisis “…could shrink the global economy by 20%.” Taking action will cost… are you ready… 1%. According to Stern, the economic drain of global warming would come from:

  • Floods from rising sea levels could displace up to 100 million people
  • Melting glaciers could cause water shortages for 1 in 6 of the world’s population
  • Wildlife will be harmed; at worst up to 40% of species could become extinct
  • Droughts may create tens or even hundreds of millions of “climate refugees”

Prime Minister Tony Blair and Chancellor Gordon Brown are backing the report, the first on climate change from an economist, and backed the idea that “1% of global gross domestic product (GDP) must be spent on tackling climate change immediately.” Blair particularly labeled such expenditures an “investment,” claiming “For every Β£1 invested now we can save Β£5, or possibly more, by acting now.”

The climate change denial industry will have a tough time with this one — Stern’s a former chief economist of the World Bank, hardly a bunch of pinko commies. I’m sure they’ll shift more towards criticizing the science, but that’s falling more and more on deaf ears. The thing I really don’t get about the deniers: this is a tremendous opportunity, not only for preventing lots of death and destruction, but for making a lot of money. The green sector is booming — I’m no economist, but I’m also not aware of any other business category growing by double digits. I really don’t see what’s not to like if you’re a conservative — there’s business to be done, folks. Furthermore, it’s business in the very best spirit of capitalism — moving quickly and creatively to serve the community while making a profit. Are these folks really not imaginative enough to recognize that lots of money can be made without drilling for oil, digging for coal or manufacturing oversized gas-guzzlers? I have a real problem understanding how people who’ve made it to the top of such industries can’t see the possibilities here…

If you’d like to see a more thorough overview of yesterday’s presentation of the report, it’s available from the British Treasury Department (thanks, Tod!). If you want to read the report, it’s available here.

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