The financial costs of tackling global climate change will be stupendous, amounting to trillions of dollars worldwide over the coming decades. Or so a common notion has it.
Perhaps, though, that view has it backwards. Rather, by setting out to keep rising temperatures moderate and manageable through comprehensive mitigating measures, we could save trillions of dollars by the end of the century. To be more precise: 20 trillions.
“[T]here is a 75% chance that keeping global warming to a 1.5 °C rise — an aspiration of the Paris climate treaty — will leave the world better off than letting it run to a 2 °C rise,” write the authors of a new study in Nature, who examined the possible financial costs and benefits involved in mitigating climate change. “The probable savings: a cumulative US$20-trillion increase in world GDP by the end of the century. (Global GDP in 2016 was about $76 trillion.)”
Fostering green economies, such as through the provision of incentives for renewable energy sources, might be costly in the short term, yes. Yet they will bear plenty of financial benefits in future, not least by mitigating the worst effects of climate change that would wreak havoc with the planet’s economies and people’s ways of life. The study’s authors examined the impact of temperature changes on GDP in 165 countries in the half century between 1960 and 2010. They then projected their results all the way to 2100. What they found was that the more temperature changes can be limited, the greater the economic benefits will be for the planet’s nations.
Under the Paris Agreement, the world’s countries agreed to try and limit warming in average global temperatures “well below” 2 degrees Celsius above pre-industrial levels, preferably keeping it below 1.5 degrees Celsius. The study’s authors posit that if increases in average global temperatures could indeed be kept to 1.5 degrees Celsius rather than allow them to rise to 2 degrees, the planet’s economies would save a whopping $20 trillion. That’s the equivalent of the current annual GDP of the planet’s strongest economy, the United States, and accounts for more than a quarter of the planet’s total annual GDP.
In addition, the authors note, more than two-thirds of low- and medium-income nations, which contain 90% of the world’s population, would likely benefit far more economically from mitigating climate change now than from trying to adapt to it later.