Current Issue
This Month's Print Issue

Follow Fast Company

We’ll come to you.

2 minute read

The Price Of Ignoring Climate Change Is Far Higher Than We Think

In the future, society will have to pay for each puff of carbon emissions emitted today. And the bill from the damages—from rising seas and the spread of diseases—is going to cause sticker shock.

[Image: Smokestack via Shutterstock]

Critics of strong national climate change policies often talk about how much taking action costs the economy. What they usually don’t mention is the cost of doing nothing.

It’s easy to ignore. The figure is hard to pin down and involves estimating the economic damage that will be caused by climate change decades into the future, whether that includes bigger storm surges and more wildfires or higher crop prices and health care costs. Economists and scientists have been together grappling with the question—trying to put a dollar figure of the "social cost" of emitting a single ton of carbon dioxide—for more than a decade. Getting to that dollar figure makes it far easier for politicians and policymakers to compare the costs of setting various climate and energy policies, such as regulating coal power plants, to the benefits of lowering greenhouse gas emissions.

In a new report as part of the Cost of Carbon Pollution project, a trio of groups—the Environmental Defense Fund, NYU’s Institute for Policy Integrity, and the Natural Resources Defense Council—explain how the Obama administration is continuing to lowball these "social cost of carbon pollution" estimates.

For the last few years, the U.S. government has been including a dollar figure that captures the negative consequences of climate change, when it analyzes all kinds of proposed policies that would directly or indirectly affect levels of greenhouse gas emissions. In 2010, it was supposed to be worth $24 to the entire economy to avoid one single ton of carbon dioxide emissions. In 2013, the Obama administration upped the figure to $37 a ton, based on updated scientific and economic models.

The new report finds that $37 is low as well, because it doesn’t take into account an array of climate change impacts, such as the spread of lyme disease, lowered property values, energy supply disruptions, and forced migrations.

The debate seems obscure, but it could actually have an effect on hundreds of rules set by the federal government, says Ricky Revesz, director of the Institute for Policy Integrity and former dean of NYU’s School of Law. A high enough dollar cost figure could justify the government investing in and setting policies that spur the development of new energy and carbon capture technologies that reduce emissions. A low figure means that fewer investments would probably occur.

Of course, there is uncertainty in estimating these figures but Revesz says that is a fact of life. "Anything that’s important has uncertainty attached to it," he says. "If anything, the number has always been understated."

loading