COPENHAGEN – At its heart, much of the debate over climate change deals with just one divisive and vexing question: How big should cuts in carbon emissions be?
This narrow focus makes the debate unconstructive. Everybody wants to prevent global warming, and the real question is: How can we do that best? We should be open to other ways to stop warming – such as cutting carbon emissions in the future instead of now, or focusing on reducing emissions of other greenhouse gases. Global warming will create significant problems, so carbon reductions offer significant benefits. Cutting carbon emissions, however, requires a reduction in the basic energy use that underpins modern society, so it will also mean significant costs.
The prominent climate economist Professor Richard Tol of Hamburg University has analyzed the benefits and costs of cutting carbon now versus cutting it in the future. Cutting early will cost $17.8 trillion, whereas cutting later will cost just $2 trillion. Nonetheless, the reduction in CO2 concentration – and hence temperature – in 2100 will be greater from the future reductions. Cutting emissions now is much more expensive, because there are few, expensive alternatives to fossil fuels. Our money simply doesn’t buy as much as it will when green energy sources are more cost-efficient.
Tol strikingly shows that grand promises of drastic, immediate carbon cuts – reminiscent of the call for 80% reductions by mid-century that some politicians and lobbyists make – are an incredibly expensive way of doing very little good. All the academic models show that, even if possible, limiting the increase in global temperature to 2oC, as promised by the European Union and the G-8, would cost a phenomenal 12.9% of GDP by the end of the century. This would be the equivalent of imposing a cost of more than $4,000 on each inhabitant every year, by the end of the century. Yet, the damage avoided would likely amount to only $700 per inhabitant.