Watch the full episode Climate Change: The Rising Cost.
The economic impact of climate change driven by global warming is both genuine and impossible to calculate precisely for the decades ahead, but we will get to know the costs as the bills come in.
A list of things already going wrong is well documented: carbon buildup in the atmosphere nudging average global temperatures ever higher, severe weather steadily growing more severe, cataclysmic rainfall in some regions and wildfire-promoting draughts and spreading desertification in other regions, melting glaciers and polar caps, permafrost defrosting, rising sea levels, ocean acidification, collapsing fisheries, deterioration of reefs, biodiversity in decline as species of life at all levels die off, forest disappearing, fresh water supplies shrinking, food supply chains destabilized and widening societal disturbances everywhere. Without a fix, it will only get worse.
Except for all-out nuclear war, humanity has never before faced the scale of danger now posed to the welfare and survival of so many people. But because world leaders recognized that triggering tens of thousands of nuclear weapons would result in mutually assured destruction, we have so far avoided that particular form of annihilation. But today ordinary people and world leaders alike are baffled by the slower-moving menace issuing from our reckless, undeclared – but undeniable – war on the environment. And too many of us, with too much influence in the business and political sectors, don’t see it, or see only our own interests, or simply don’t care.
We survive on this planet because of its hospitable atmosphere. Looking straight up from ground level, that cloak of sustenance seems to many to be immense and therefore beyond the ability of man to corrupt. They are mistaken. The atmosphere we thrive in extends only 10 miles above the earth’s surface. Earth’s circumference of the earth is 24,000 miles and its diameter at the equator is 8,000 miles. Viewed from space, our atmosphere is seen, in dramatic perspective, as a tight protective skin that is really scary thin.
The same science that we rely on for understanding the physical world is telling us emphatically that it is not only possible for man to corrupt earth’s atmosphere but that we are actually doing exactly that by relentlessly burning fossil fuels at accelerating rates which in turn are driving carbon dioxide and other greenhouse gases to dangerous levels that will persist for a long, long time, and which are already changing the chemistry of the oceans.
Yes, there are many unknowns and uncertainties, ranging from the speed of the transformations taking place, the interplay of the phenomenal disturbances and conflicts already materializing, and other yet to appear, and the effectiveness and outcomes of efforts to mitigate and adapt as change occurs. Let’s just leave aside the erratic reactions of political players that will also figure in.
The great stakes were laid out in plain language by former U.S. Treasury Secretary Robert Rubin in a sobering discussion recently in Washington D.C. Rubin said that as he began to learn more and more about the realities of climate change, “I began to realize that you have not only the most likely scenarios, which are pretty serious and in many cases severe over time, but you also have the real possibility, I think unfortunately maybe even a fairly high probability, that what ultimately happens are consequences that are vast multiples of the base case and that the effects, instead of just being severe, in the long run become catastrophic.”
Such catastrophes have happened before. Five times over a period spanning hundreds of millions of years, before the evolution of human beings, this planet experienced horrendous shocks, each one wiping out many forms of life forms then existing. The two most dramatic of these mass extinctions are known today as the “K/T Extinction, which snuffed out the dinosaurs 66 million years ago, and “The Great Dying,” which 250 million years back erased 90 percent of the world’s species. These events came suddenly and involved meteor or asteroid strikes and a series of massive volcanic eruptions. The Smithsonian Institution’s Museum of Natural History recently previewed a film, “Mass Extinction: Life at the Brink,” that described those events and suggested that we are now entering the start of a sixth mass extinction period. “The Sixth Extinction” also happens to be the title of a new book by Elizabeth Kolbert, who explains with clear, matter-of-fact prose, the causes, the evidence and the convincing science of what is taking place. Citing the five prior extinction episodes Kolbert states, “In what seems like a fantastic coincidence, but it is probably no coincidence at all, the history of these events is recovered just as people come to realize that they are causing another one.” It remains to be seen, she acknowledges, if the sixth extinction will reach the levels of the previous five.
Although the film screened by the Smithsonian deliberately avoids speculation about what happens to human life in a new era of extinctions, Kolbert quotes experts like anthropologist Richard Leakey who warned that we may be victims as well as the agents of the sixth mass extinction, and Stanford ecologist Paul Ehrlich who laments that humanity is busily sawing off the beneath its “perch” atop the ecosystem.
If man-made climate change is an existential threat it seems absurd to quibble over the number of dollars that we might stand to lose if we remain locked into self-destructive behavior, or the amount we stand to save if we act swiftly to halt our lemming-like stampede toward the abyss. And the many billions of dollars we already spend because of climate change now are peanuts compared the economic blows waiting not far down the road.
Economics isn’t as clear and reliable as physical and chemical science, but it can capture the attention and shift the thinking of those who today refuse to face the unpleasant logic of cascading environmental crises. So let’s just glance at the swarm of data that attempts to measure economic consequences attending climate change already appearing on the ledger sheets. It’s a jumble of numbers, of course.
In July, 2014, the White House Council of Economic Advisers, reviewing damage estimates in climate economics literature, warned that three degrees Celsius in warming above pre-industrial levels would likely bring a one percent drop in total global economic output. One percent of 2014’s global economic output of $609 trillion would amount to $6 trillion. And temperatures have already risen by almost one full degree above the baseline.
In the United States, tax dollars increasingly are being diverted to cope with increasing intensity and frequency of extreme weather events and other manifestations of the problem, like longer wildfire seasons. In 2013, the federal forest service ran out of money earmarked for fighting forest fires and had to siphon an extra $600 million in funding from other priorities to keep fighting further blazes.
Super Storm Sandy in 2012 caused $65 billion in damages, making it the second most expensive weather disaster in U.S. history, behind 2005’s Hurricane Katrina, which bestowed damages of $108 billion. Fourteen extreme weather events in 2011 each exceeded $1 billion. There were 11 more in 2012. The bill for those two years topped $188 billion in total damages according to the U.S. Office of Management and Budget. Future sea level rise and chronic storm and tidal flooding will threaten trillions of dollars worth of coastal real estate over the next 30 years, driving insurance costs beyond the reach of middle-class families and giving grim new meaning to the term “sunken investments.”
More than private property is at risk. “The fact is our water and sewer systems, our power plants and power grids, and roads and airports were not designed or built for the extreme climate conditions that we’re facing now, and expect to face in the coming decades,” said Jack Lew, the current U.S. Treasury Secretary.
Meanwhile, drought continues to slam U.S. agriculture, costing corn and soybean farmers a record $14 billion in 2012, while in some areas of the country the opposite problem, excessive rainfall, has been battering interfering with harvests and drowning crops.
Some experts, who choose to express future temperature increases in degrees Fahrenheit rather then Celsius, say increasing levels of carbon in the atmosphere will raise global temperatures between three and eight degrees. Even three degrees, the lower end of that range, “would change the way we live and pull some hardships,” said Economics Professor Michael Greenstone of the University of Chicago, who is director of the Energy Policy Institute there. But at the high end, eight degrees Fahrenheit, Greenstone continued, “that’s where life as we understand it in the United States and lots of other countries becomes a lot more complicated. You would see large crop declines and tremendous demands for new energy. And that’s to say nothing of the very painful discussion that we could need to have of which parts of the United States we are going to build dams to protect and which parts we are going to let go.”
Economic pain is slowly being distributed by climate change already. But we feel only the thin edge of the wedge right now, though those directly affected think it’s pretty bad. They really haven’t seen “bad” yet — but it’s coming. Let the causes continue unchecked and our descendents will be in for it. At risk in the long run are the most basic essentials: water to drink, food to eat, and shelter from the elements.
And remember, economics isn’t just about numbers it’s also about trends. The trends are plain. They will become more so. Keep an eye on the way billionaires begin to buy up cattle ranches and assemble security teams to protect their enclaves. And perhaps a future proliferation of large motor and sail-driven yachts, crewed by expert seamen, to keep afloat for as long as possible those who can afford them. Oh wait, some of that already happening isn’t it