"Scientists find “net present value of climate change impacts” of $1240 TRILLION on current emissions path, making mitigation to under 450 ppm a must"
[The authors of this study framed their results incorrectly, I think, causing many in the media to miscover or ignore the story.]
Scientists led by a former co-chair of the Intergovernmental Panel on Climate Change [warn] that the UN negotiations aimed at tackling climate change are based on substantial underestimates of what it will cost to adapt to its impacts.
The real costs of adaptation are likely to be 2-3 times greater than estimates made by the UN Framework Convention on Climate Change (UNFCCC), say Professor Martin Parry and colleagues in a new report published by the International Institute for Environment and Development [IIED].
And as the IIED reported, the study Assessing the costs of adaptation to climate change: a review of the UNFCCC and other recent estimates concludes costs will be even more when the full range of climate impacts on human activities is considered.
The study finds that the mean “Net present value of climate change impacts” in the A2 scenario is $1240 TRILLION with no adaptation, but “only” $890 trillion with adaptation.
The mean [annual] impacts in 2060 are about $1.5 trillion…. As usual, there is a long right tail, with a small probability of impacts as large as $20 trillion.
Don’t worry folks, it’s only a “small probability” — but that “fat tail” by itself is enough to render all traditional economic analyses useless (see Harvard economist: Climate cost-benefit analyses are “unusually misleading,” warns colleagues “we may be deluding ourselves and others”). Let’s put aside the fact we are on pace to exceed the A2 scenario (which is “only” about 850 ppm atmospheric concentrations of CO2 in 2100): See U.S. media largely ignores latest warning from climate scientists: “Recent observations confirm “¦ the worst-case IPCC scenario trajectories (or even worse) are being realised” “” 1000 ppm. For this country, the A2 scenario means 9 to 11°F warming over most of inland U.S. by 2090 with Kansas above 90°F some 120 days a year.
But here’s the key point the media and the authors failed to convey. In the “aggressive abatement” case (450 ppm), the mean “Net present value [NPV] of climate change impacts” is only $410 trillion — or $275 trillion with adaptation. So stabilizing at 450 ppm reduces NPV impacts by $615 to $830 trillion. But the abatement NPV cost is only $110 trillion — a 6-to-1 savings or better.
Bizarrely, the authors never point this out directly. They are adaptation experts, so rather than focusing on the immense economic benefits of preventing catastrophic global warming in the first place, they offer up this secondary conclusion as their primary finding:
Parry and colleagues warn that this underestimate of the cost of adaptation threatens to weaken the outcome of UNFCCC negotiations, which are due to culminate in Copenhagen in December with a global deal aimed at tackling climate change.
“The amount of money on the table at Copenhagen is one of the key factors that will determine whether we achieve a climate change agreement,” says Professor Parry, visiting research fellow at the Grantham Institute for Climate Change at Imperial College London. “But previous estimates of adaptation costs have substantially misjudged the scale of funds needed.”
Uhhh, not quite. What threatens to weaken the outcome of the Copenhagen negotiations is that the overwhelming majority of politicians, opinion makers, and journalists in this country (and around the world, I think) don’t get that 1) the cost of inaction is catastrophically high [and potentially beyond calculation] and 2) the cost of action is far, far lower [see also "Intro to climate economics: Why even strong climate action has such a low total cost -- one tenth of a penny on the dollar"].
Oh well. If you’re interested in why the IPCC underestimated adaptation costs, the study focuses on several areas:
- Water: The UNFCCC estimate of US$11 billion excluded costs of adapting to floods and assumes no costs for transferring water within nations from areas of surplus to areas of deficit. The underestimate could be substantial, according to the new report.
- Health: The UNFCCC estimate of US$5 billion excluded developed nations, and assessed only malaria, diarrhoea and malnutrition. This could cover only 30-50% of the global total disease burden, according to the new report.
- Infrastructure: The UNFCCC estimate of US$8-130 billion assumed that low levels of investment in infrastructure will continue to characterise development in Africa and other relatively poor parts of the world. But the new report points out that such investment must increase in order to reduce poverty and thus avoid continuing high levels of vulnerability to climate change. It says the costs of adapting this upgraded infrastructure to climate change could be eight times more costly than the higher estimates predicted by the UNFCCC.
- Coastal zones: The UNFCCC estimate of US$11 billion excluded increased storm intensity and used low IPCC predictions of sea level rise. Considering research on sea level rise published since the 2007 IPCC report, and including storms, the new report suggests costs could be about three times greater than predicted.
- Ecosystems: The UNFCCC excluded from its estimates the costs of protecting ecosystems and the services they can provide for human society. The new report concludes that that this is an important source of under-estimation, which could cost over US$350 billion, including both protected and non-protected areas.
No surprise, really, given that the IPCC lowballs amplifying feedbacks and climate impacts, too.
Anyway, if you’re interested in the important stuff — the enormous benefit of stabilizing at 450 ppm — just jump to Chapter 8, page 103, here.