Failing to act quickly on climate change could dramatically increase the cost of stemming carbon emissions, the White House warns in a report today that tests a new political message about "climate insurance."
The economic impact of reducing emissions will rise 40 percent for each decade that the United States delays in establishing an aggressive climate plan, according to the president's Council of Economic Advisers, which prepared the 33-page report.
One reason is because increasingly stringent policies could be needed to cut growing carbon output over a shorter period of time. Also, delaying research into new energy technologies, which might have been used earlier, could add to the economic burden. And if emissions continue, costs could grow sharply when crop production drops, flooding increases and drinking water becomes harder to obtain.
The report notes that "each year of delay means more CO2 emissions, so it becomes increasingly difficult, or even infeasible, to hit a climate target that is likely to yield only moderate temperature increases."
"These costs will take the form of either greater damages from climate change or higher costs associated with implementing more rapid reductions in greenhouse gas emissions," the report says. "In practice, delay could result in both types of costs."
The document, which White House officials discussed with reporters yesterday, also claims that if the world fails to use less fossil fuels before average temperatures rise 3 degrees Celsius—or 2 degrees higher than today—the United States faces yearly economic losses of $150 billion. That amounts to about 1 percent of the nation's economy.
The report was released during a key week for the administration's climate agenda. U.S. EPA is holding several open meetings around the country to hear from critics and supporters of its proposed rules to limit greenhouse gas emissions at coal-fired power plants. That is intensifying the messaging efforts on both sides, with implications for midterm elections, international climate negotiations and 2016 presidential campaigns.
Jason Furman, chairman of the White House Council of Economic Advisers, said the report justifies President Obama's actions on climate change, which he enacted without congressional input. He said there's no dispute about the human role in rising temperatures, though he noted that its timing and magnitude are unknown.
"Some have pointed to that uncertainty and claimed that it's an argument for not acting today, waiting until we know more to act later," Furman told reporters yesterday on an embargoed conference call. "What this report makes clear is, first of all, we know way more than enough to justify acting today."
'Save us money' with climate insurance
The document continued the administration's effort to frame the issue in terms that the public might grasp. In the past, the White House has emphasized the health impacts of climate change and the moral obligation of preserving a planet for younger generations. Today, the administration is aiming at the practical person who crunches the numbers.
The report emphasizes the idea of "climate insurance."
It draws on economic research that peers into the consequences of abrupt climate events that could reshape the natural environment—and the economic one. They include geologically sudden sea-level rise from melting ice sheets, bursts of carbon dioxide released from melting permafrost and extensive extinctions on land and underwater.
Under these scenarios, the cost of reducing emissions now might seem like a deal.
The report says, "just as the sufficiently high threat of a fire justifies purchasing homeowners insurance, the threat of large-scale losses from climate change justifies purchasing 'climate insurance' in the form of mitigation policies now and that taking actions today could help to avoid worst-case outcomes."
Added Furman, "Acting today will save us money."
The report did raise some eyebrows. Robert Stavins, a Harvard University economist who studies climate change, said it correctly emphasizes the global economic impact from rising temperatures—and the idea that U.S. action on climate can prompt other nations to cut their carbon.
But he also said the report is "potentially misleading" in suggesting that a delay in American climate policies could lead to the dramatic scenarios outlined in the report. For example, the report fails to mention that a 3-degree-Celsius increase would be a massive failure by many nations, he said.
Stavins also noted that most of the economic benefits from reducing emissions at power plants would come from reductions in particulates, not carbon dioxide. Those benefits are already being anticipated as a result of EPA's climate rules on power plants. Cutting particulates is expected to save $45 billion by 2030 under EPA's rule, compared to $3 billion in climate benefits. That doesn't seem to be covered in the report.
"The greatest arguments would really be on localized air pollution," Stavins said.
Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500