The Cost of Delaying Action to Stem Climate Change
From the Executive Office of the President Council of Economic Advisers, this report examines the economic consequences of delaying the implementation of climate change mitigation policies, and in turn, demonstrates the comparative net benefits of implementing such policies without delay.
The report draws two main conclusions. First, delaying action is very costly. While holding back climate policies can avoid or reduce expenditures on new pollution control technologies in the near term, the costs of delay are much greater. The research finds that the costs of achieving a fixed climate change goal would be 40 percent higher for every decade without substantial mitigation practices. To delay action in achieving a fixed set of climate goals, then, in turn, incurs greater upfront costs to make up for the years in which additional carbon pollution was released into the atmosphere. Additionally, the carbon mitigation targets that are achievable today may become unrealistic the longer policy and implementation is delayed.
This resource was featured in the August 1, 2014, ASAP Newsletter.
"Remember the good ol' days when limiting warming to two degrees Celsius was the goal to avoid "dangerous climate change"? Well, it looks like the threshold is being pushed to at least three degrees, which, if reached, would result in extreme "economic damages" to the tune of 0.9 percent of global output. If we wait 10 years to take action to reduce emissions, those damages are estimated to go up by 40 percent...yikes."
The report finds that if delay led to stabilizing global temperatures at 3° Celsius above pre-industrial levels instead of 2° Celsius, global output would decline by nearly 1 percent. To put this percentage in perspective, 0.9 percent of estimated 2014 U.S. GDP is approximately $150 billion. These costs are not one-time - they are incurred year after year because of the permanent damage caused by additional climate change resulting from the delay.
The second conclusion is that uncertainty about the most severe, irreversible consequences of climate change adds urgency to implementing climate policies now that reduce GHG emissions. The most damaging potential consequences of climate change - consequences so severe that these events are sometimes referred to as climate catastrophes - are yet to be fully understood.
These large-scale events include, for example, the melting of the West Antarctic ice sheets and other ice sheets – which would cause large degrees of sea level rise – as well as the release of additional methane through thawing of permafrost, which would accelerate global warming. These and other potential large-scale changes are irreversible on relevant societal time scales.
Publication Date: July 29, 2014
- Executive Office of the President of the United States