Two reports issued January 25 spell out the enormous upsides of limiting global warming's severity, along with the growing perils from inaction.
A report by the Deloitte Economics Institute, Andrew Freedman of Axios wrote, “shows that rapidly decarbonizing the U.S. economy during the next 50 years could generate $3 trillion, and add nearly 1 million more jobs to the economy by 2070.”
"Unchecked climate change is a costly choice for the U.S.," Alicia Rose, deputy CEO for Deloitte U.S., told Axios. Such a loss, Deloitte found, would be equivalent to almost 4 percent of U.S. GDP in 2070, or about $1.5 trillion. Insufficient action would also cost jobs, with nearly 900,000 disappearing each year due to climate-caused damage through midcentury. In contrast, Deloitte concluded, the cost of moving the country to net-zero emissions would be about 0.1% of GDP ($35 billion per year through 2050).
One challenge facing policymakers is the need to focus on the long term rather than the short term–and the track record on that is not so good. The Deloitte report said that the costs of the energy transition would be front-loaded, with the break-even point, or "turning point," coming between 2041 and 2050.
Deloitte compared a scenario in which global warming is left relatively unchecked, with average temperatures increasing to 3° C (5.4° F) above preindustrial levels, with one in which the Paris target of limiting warming to "well below" 2° C is met.
One example of the financial peril that would likely result from inaction is the cost of floods, which have become more frequent and more damaging , due in part to climate change. A study by University of Bristol researchers, published January 31 in Nature Climate Change, forecasts that average annual flood losses in the U.S. would surge by 26.4 percent by 2050, from $32.1 billion today to $40.6 billion. The greatest increases are projected for the Southeast, along the Gulf and Atlantic coasts.
“It’s the latest scientific research to show the myriad ways in which rising temperatures associated with climate change could reshape society, destroy homes and infrastructure, and endanger lives,” Aaron Gregg reported in The Washington Post.
The second report issued January 25, by McKinsey Global Institute, took a worldwide view. McKinsey concluded that reaching net-zero emissions by 2050 could lead to a reallocation of labor, with about 200 million direct and indirect jobs gained and 185 million lost by 2050. Reaching the goal would require $275 trillion of cumulative global capital spending or about 7.5 percent of global GDP from 2021 to 2050.
In its report, McKinsey wrote, “It is important not to view the transition as only onerous; the required economic transformation will not only create immediate economic opportunities but also open up the prospect of a fundamentally transformed global economy with lower energy costs, and numerous other benefits—for example, improved health outcomes and enhanced conservation of natural capital.”
The Deloitte and McKinsey reports are consistent with previous research showing the economic wisdom of taming global warming. In 2019, for example, the World Bank found that an investment of $1, on average, yields $4 in benefits.
We continue to urge Capitol Hill lawmakers to enact a carbon tax and other measures to put our nation in a position to honor our Paris Accord commitments. They need to hear from all of us that failure to take strong action is not an option.