Climate change is going to cost a lot of money. At this point, the question is whether those costs will be for mitigation and investment — or clean-up.
The UN Development Program released a report this week that put a number on the cost of mitigating and adapting to climate change: 1.6 percent of the world’s GDP, every year, from now until 2030. The report follows last year’s influential Stern Review, which estimated that the annual cost of unabated climate change “could be equivalent to 20 percent of GDP or more.”
We’re likely to see a lot of reports like these as various parties try to frame the debate for the upcoming meeting of parties to the United Nations Framework Convention on Climate Change in Bali. The UNFCC is the body out of which Kyoto grew, and the Bali negotiations will supposedly lay out a “roadmap” for a global post-Kyoto strategy to slow greenhouse gas emissions.
The U.S. is the major wrench in the global machine. Along with China, we’re refusing to meaningfully come to the table to price and cap carbon emissions. Greentech investors should be lobbying their Congresspeople like crazy to bring the U.S. to the table, not unlike the visit that some prominent Silicon Valley VC paid to Gov. Arnold Schwarzenegger of California ahead of the passage of that state’s landmark global warming bill last summer.
The political message that arises from the UNDP report and others like it need to be sensitively massaged. Slowing GDP sounds bad, but there might be considerable support among the world’s populations if they were asked, “Would you, for a limited amount of time, give up a small percentage of your income to stop global warming?”
We need American citizens to answer yes to that question. Additional arguments, like the hundreds of billions of dollars that the Stern Review estimated clean energy technologies will generate by 2050, will help, but this is a war on climate change and the impossible economics it generates down the road. Sacrifices and investments will have to be made, just like they were during World War II, which just happened to be followed by the greatest economic boom the world has ever seen.