Axios: What's the Actual Cost of Not Addressing Climate Change?

The amount of carbon tax — a neoliberal solution — required to achieve just a modest reduction in U.S. greenhouse gas emissions by 2030 (source). Bernie Sanders wants to reach 100 percent renewable energy for electricity and transportation by no later than 2030 and complete decarbonization no later than 2050. One of those two ideas just might solve the problem, and the other has not a prayer of working.

by Thomas Neuburger

Every report on the release of Bernie Sanders' Green New Deal plan contains at least one quote in which someone is shocked, dismayed or dismissive about the cost — $16 trillion in total — even though the plan will, as the proposal itself says, "pay for itself" in a number of ways:

• This plan will pay for itself over 15 years. Experts have scored the plan and its economic effects. We will pay for the massive investment we need to reverse the climate crisis by:
• Making the fossil fuel industry pay for their pollution, through litigation, fees, and taxes, and eliminating federal fossil fuel subsidies.
• Generating revenue from the wholesale of energy produced by the regional Power Marketing Authorities. Revenues will be collected from 2023-2035, and after 2035 electricity will be virtually free, aside from operations and maintenance costs.
• Scaling back military spending on maintaining global oil dependence.
• Collecting new income tax revenue from the 20 million new jobs created by the plan.
• Reduced need for federal and state safety net spending due to the creation of millions of good-paying, unionized jobs.
• Making the wealthy and large corporations pay their fair share.

The proposal goes on to note (emphasis mine):

The cost of inaction is unacceptable. Economists estimate that if we do not take action, we will lose $34.5 trillion in economic activity by the end of the century. And the benefits are enormous: by taking bold and decisive action, we will save $2.9 trillion over 10 years, $21 trillion over 30 years, and $70.4 trillion over 80 years.

When it comes to numbers this big, the mind shuts down. Spending $16 to save $34 is easily understood. Spending $16,000 to save $34,000 is not beyond most imaginations.

But spending $16 trillion to save $34 trillion? Those are scary numbers, no matter which side of the cost-benefit equation they're on. The mind shuts down contemplating them and Sanders' opponents are hoping voters will be so frightened of either one, they won't begin to consider the importance of the moon-shot-type project he's proposing.

The problem is, $34 trillion isn't the actual number, the actual cost of not addressing the climate crisis. Try ten times as much. The real cost of inaction is above $500 trillion.

The Real Cost of Climate Change

Consider this, from that famously alarmist, extremely hard-left news source Axios, in a piece entitled "The cost of climate change." They begin with an obvious fact — the amount of wealth that exists on the planet today:

There's $500 trillion of wealth on planet Earth, give or take: Maybe $230 trillion in land and property, $200 trillion in debt and $70 trillion in equity.

And then the obvious conclusion: All of it is at risk if the climate goes south while we go north (or vice versa). Actually, more than all of it if future wealth is considered.

Axios again:

The big picture: All of that wealth comes, ultimately, from the planet, and the climate. Specifically, it has come from a stable climate. William Nordhaus points out in his 2013 book "The Climate Casino" that “the last 7,000 years have been the most stable climatic period in more than 100,000 years.” The last 7,000 years have also seen the rise of civilization and the creation of that $500 trillion in wealth. This is not a coincidence.

• Nordhaus won the Nobel Prize this week, in an announcement that coincided with the release of a hugely important UN Intergovernmental Panel on Climate Change report on what will happen to the world when it gets 1.5°C, or 2.7°F, warmer than preindustrial levels.

The report puts the cost of a 1.5°C increase at $54 trillion, in today's money.

• You think $54 trillion is a lot? That number comes from research that also says that a 2.0°C increase will cause $69 trillion of damage, and a 3.7°C increase will cause a stunning $551 trillion in damage.
• $551 trillion is more than all the wealth currently existing in the world, which gives an indication of just how much richer humanity could become if we don't first destroy our planet.
• We'll be environmentally richer, too. While it's hard to put a dollar value on that, the value of environmental benefits has been rising steadily over time and will continue to do so. Already, we regret environmental destruction in the past and would happily give up a small fraction of our current wealth to undo it.

The bottom line for Axios: "Human civilization has reached the very end of reaping the dividends from a stable climate. Compared to recent decades, the world in 2100 will have a 13% reduction in crop yields (and those crops will also be less nutritious); it will also have 2.8 billion more people at risk from drought in any given month."

The Axios solutions all come from the neoliberal playbook — encourage the market to address the problem via carbon taxes, and so on — with not a word about more forceful responses like ending carbon subsidies, getting carbon-fueled cars and truck off the road, and mandating the conversion power sources to alternative energy, as the Sanders plan contemplates.

Still, the good neoliberal folks at Axios get it. More than $500 trillion in wealth will disappear if we fail to address the coming climate crisis.

Now all they need to get is the need to force the solution, and not just encourage it.