Fighting climate change doesn’t have to be expensive, according to a new report, and it might actually be a bit cheaper on the net than the base case of letting the planet warm up. That’s the argument from the Global Commission on the Economy and Climate, which was co-founded last year by Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden, and the U.K.
The diagram below makes the argument. In the base case, it shows, the total global investment needs between 2015 and 2030 will cost $89 trillion. Combating global warming would add $14 trillion to the bill: $9 trillion for energy efficiency and $5 trillion for low-carbon energy technology.
But there would be savings of more than $9 trillion from reduced capital spending on fossil fuels, reduced spending on the electrical grid, and lower capital spending from more compact cities. Add to that $5 trillion in savings from lower operating expenditures, and the net savings could be about $1 trillion over the period.
The authors of the report admit there’s a large speculative element to all this. “Indicative figures only. High rates of uncertainty,” says one disclaimer. Other economic analyses have concluded that reducing greenhouse gases would cost a lot of money, although it would still be worth the price in terms of preventing, say, the inundation of low-lying coastal cities.
Here’s a diagram showing Atlanta’s urban sprawl vs. Barcelona’s compactness, which dramatizes the report’s point about the savings that can be had by encouraging density. Atlanta’s carbon emissions per person for transport are 10 times as high as Barcelona’s, the report says.
The purpose of the report is to get countries and companies started on taking climate change seriously. “Vacillation and wobbling is the enemy of investment,” British economist Nicholas Stern told reporters in a pre-release briefing. Stern, who chairs the new group’s economic advisory panel, headed a team for the British government that issued a major warning about the danger of global warming in 2006.
