… Sooner or later we’ll have to pay our share. That’s the headline for my latest piece in The Guardian. The more important message is in the “standfirst” text that runs before the article proper.
The cost of responding to climate change is trivial compared with the benefits
To spell this out, here are the concluding paras of the article
The good news is that the cost of an emergency response, while large compared with an efficient policy, will be very small in relation to an economy with an annual output, by 2030, of $2tn a year or more. To see this, we can turn to the estimates prepared for the government’s election campaign by Brian Fisher of BAEconomics.
These worst-case numbers, higher than the costs of the most radical emergency measures, amount to around $50bn a year, or 2.5% to 3% of national income. That’s a lot of money – like adding a new program on the scale of the NBN or the submarine contract every year for five to 10 years.
At the same time, it’s small enough that it would barely be noticed against the background of the general fluctuations in the economy. The average household has lost far more from the wage stagnation of the last decade. As far as the government budget is concerned, the likely impact is comparable to that of increasing health expenditures arising from our increased life expectancy and the development of new treatments.
More importantly, the cost of an emergency response to climate change is trivial compared with the benefits of stabilising the global climate at a level that is livable for humans and the natural environment. We are currently shirking our contribution to this global public good, and free riding on the efforts of others. But sooner or later we will have to pay our share.