It’s Not Too Late To Stop Climate Change, And It’ll Be Super-Cheap

CREDIT: AP Photo/Channi Anand

A temple is partially submerged in floodwaters in Jammu, India, Saturday, Sept. 6, 2014.

I rarely disagree with Dave Roberts. But he has a column on Grist, “We can solve climate change, but it won’t be cheap or easy,” that is wrong, pure and simple.

I’ll explain why it will be very cheap in two posts — one focusing on the literature and one focused more on my 15 years of experience working directly with businesses to develop, deploy, and analyze the cost-effectiveness of technologies/strategies to cut carbon pollution, including several years helping to oversee the primary federal office charged with that very mission.

The cost of action is perhaps the second most important issue in the entire climate arena. If a climate hawk like Roberts can get it wrong (along with The New York Times climate blog), there is clearly a serious misunderstanding going on.

The most important climate issue is the cost and consequences of inaction. The climate science has now reached the point that one can definitively say failure to very aggressively try to “solve” climate change is not either a rational or moral option for a nation or humanity as a whole. As Dave Roberts himself has explained, “The results of inaction are morally unacceptable. They are also economically unacceptable….”

To be crystal clear, my position — what the literature and field experience make crystal clear — is that solving climate (stabilizing at 2°C) is cheap, by any plausible definition of the word. Indeed, it is “super-cheap.”

The always overly-conservative Intergovernmental Panel on Climate Change reviewed the entire literature on the subject and concluded the annual growth loss to preserve a livable climate is 0.06% — and that’s “relative to annualized consumption growth in the baseline that is between 1.6% and 3% per year.” So we’re talking annual growth of, say 2.24 percent rather than 2.30 percent to save billions and billions of people from needless suffering for decades if not centuries.

Mitigation costs for 450 ppm

Global mitigation costs for stabilization at a level “likely” to stay below 2°C (3.6°F). Cost estimates shown in this table do not consider the benefits of reduced climate change as well as co-benefits of mitigation. The green columns show the consumption loss in the years 2030, 2050, and 2100 relative to a baseline development without climate policy. The light green column shows that the annualized consumption growth reduction over the century is 0.06%. Source: IPCC 2014.

I will come back to the benefits of reducing climate change and the other co-benefits of action.

As always, every word of the report was signed off on by every major government in the world, so the point is not even considered controversial by… pretty much anyone in a position of leadership anywhere around the world! Why isn’t this controversial to them when it seems so inconceivable to some journalists and many policymakers?

Well, first off, these are not new findings. In its previous Fourth Assessment (AR4) in 2007, the IPCC found the cost of stabilizing at 445 ppm CO2-eq corresponded to “slowing average annual global GDP growth by less than 0.12 percentage points.”

Fundamentally these conclusions are not controversial since they are based on a review of the literature, which has been consistent on this subject for a long, long time. Every major independent study has found a remarkably low net cost for climate action — and a high cost for delay. Back in 2011, the International Energy Agency warned “Delaying action is a false economy: for every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions.”

The 2014 IEA report, “Energy Technology Perspectives” (ETP 2014), explained that an aggressive effort to deploy renewable energy and energy efficiency (and energy storage) to keep global warming below the dangerous threshold of 2°C — their 2DS scenario — would require investment in clean energy of only about 1% of global GDP per year. But it would still be astoundingly cost-effective:

The $44 trillion additional investment needed to decarbonise the energy system in line with the 2DS by 2050 is more than offset by over $115 trillion in fuel savings – resulting in net savings of $71 trillion.

So yes, solving climate change is “cheap.” It is NOT “easy,” however and I have striven to avoid using that word. When I talk about this I usually say it is “not easy, but straightforward.” And by that I mean “we know precisely what needs to be done and the net cost is quite low,” which is not the case for many other problems facing humanity.

I don’t know any experts on climate solutions who assert it would be “easy.” Though I do believe most of them share the view that it would be vastly easier for humanity to do what is needed to stabilize at 2°C (or below) this century than it would be for 9+ billion people to try to live in a 4°C world — let alone the higher temperatures we could easily see next century if we trigger certain very real feedbacks.

So it is a straw man to link or conflate the two, which appears to be an attempt to tar and feather the exceedingly defensible “cheap” claim by associating it with the alleged claim it is “easy,” a term in any case that would be difficult to define quantitatively in this context, as it involves politics.

To underscore this point, consider this question: Was it “easy” for the Allies to win World War II. Most people would say “of course not,” but also that it is an utterly irrelevant issue. We had no choice but to fight — and fight to win. The same of course is true of climate change, which Roberts understands but it’s unclear the New York Times climate blogger Andy Revkin does. As I wrote over 3 years ago, since “Revkin refuses to tell us what level of concentrations he thinks the world should aim for – even a broad range, say 450 ppm to 550 ppm — he retains the luxury of attacking those who are willing to state what their target is while maintaining a faux high ground that they are being politically unrealistic while he can pretend his essentially do-little strategy is scientifically or morally viable, which it ain’t.”

If there is any evidence that Revkin’s do-little strategy would stop 4°C warming — or even 6°C warming — he has never provided it. If he can, he should. Similarly, if Revkin can show that the benefits of stabilizing at 2°C vs. 4°C (or 6°C) do not greatly exceed the IPCC cost range — even the “high end” of that range — he should do so. Few things are more important to being a positive contributor to the climate debate than defining one’s terms — specifically one’s acceptable target and one’s specific strategy for getting there.

Voltaire wisely said, “If you wish to converse with me, define your terms.” So by “solving climate change,” I mean stabilizing at 2°C, which I fully realize is not fully solving the problem, but there really isn’t anywhere near as much analysis on the cost of hitting a much lower target, as the IPCC has noted.

By “cheap” I am using the definition you can easily find online: “low in price; worth more than its cost” or “purchasable below the going price or the real value” or “relatively low in price.” The point is “cheap” is virtually always defined “relatively” — in relation to the actual cost or value of the goods and services being purchased.

Relatedly, “cheap” is certainly relative to one’s own wealth. So what might be considered expensive for the 99% can be cheap for, say, the Koch Brothers. Most of us could not even contemplate assembling a small fraction of the $889 million to influence the 2016 election, as they intend. But both Charles and David Koch are worth $40 billion — so either of them could cover the entire cost with just a portion of the earnings they make on their money without touching the principal. And stopping regulations, especially environmental regulations, could easily be worth many, many billions of dollars to them in coming years. So, anyway you look at it — cheap (for them).

The nation and the world are exceedingly wealthy in pure economic terms. Our GDP is some $17 trillion. The global GDP is around $75 trillion. So something that required the world to spend, say, $1 trillion a year would have to be considered cheap, assuming you got reasonable value in return (like, say, not destroying a livable climate for the next thousand years) of. If you made $100,000 a year, would it be “cheap” to spend, say, $1,000 a year to protect yourself from a potentially catastrophic failure of your health? Of course. In fact, people routinely pay vastly more than that.

Is the cost of climate action “cheap” compared to the cost of climate inaction, as Roberts himself has written?

While economic modeling is pretty good at overestimating the cost of environmental action (because it is lousy at anticipating innovation), it is equally good at underestimating the cost of inaction, since is hard to put a price on, say, Dust-Bowlifying one third of the currently habited and arable landmass of the planet, which is what 4C would do.

As the IPCC explains, the estimate for the cost of climate inaction does not factor in the economic benefit of avoiding climate catastrophe. A few years ago, scientists calculated that benefit as having a net present value of $615 to $830 trillion. So again, action is super cheap.

Roberts and Revkin both point out that Paul Krugman and I embraced the IPCC numbers. As an aside, in a debate on economics, I’d rather be on the side of a winner of the Nobel Prize in economics.

Roberts writes, “as Krugman and Romm no doubt both know, the idea that aggressive climate mitigation is going to shave precisely 0.06 percent off GDP growth is utterly fantastical.” But “precisely” is a straw man. Indeed, my post had the IPCC chart (above) that explicitly shows the range in potential lost annual growth is 0.04% to 0.14%. Even the high end of the range is super-cheap.

Roberts writes that “these numbers are just this side of wild guesses, based on assumptions about economic growth, resource prices, and technological development decades in the future.” That’s not true. These numbers are confirmed by detailed bottom of technology-by-technology analyses. And by real experience by real companies in cutting carbon pollution (as I’ll discuss in a later post).

In fact, the technology cost curves for wind and solar have been studied in great detail, so we have a very reasonable way of projecting future costs. Again, if one were going to critique these models one would have to say they are generally lousy at anticipating just how fast innovation can occur (when environmental regulations are put in place) and have historically wildly overestimated the cost of meeting environmental regulations as a result.

Roberts writes (incorrectly), “you don’t have to accept my skepticism about models to find these numbers fishy. Even if you take the IPCC’s number at face value, it is meant as the low bound of possible costs — meaning it assumes rapid, large-scale, steady, rational progress toward energy transition. It assumes that mitigation efforts will play out like an economist’s spreadsheet.”

No. The IPCC numbers aren’t the “low bound” of net costs. The IPCC explicitly says that it does not take into account co-benefits, such as the health benefits that would occur from the dramatic reduction in non-CO2 pollutants that would accompany. These co-benefits can be vast. A 2014 IEA report on the productivity and health co-benefits of just the energy efficiency measures find a benefit of some $18 trillion — benefits sufficient to reduce the cost of those measures by a factor of two or three!

Revkin also notes that Krugman and I cite the IPCC panel’s cost numbers, and then claims:

As with all such analyses, fine print matters and just one panel caveat such enthusiasts didn’t mention was this: “Under the absence or limited availability of technologies, mitigation costs can increase substantially depending on the technology considered.”

This is not the “gotcha” moment Revkin thinks it is. I didn’t include that “caveat” because the IPCC already factors in the impact of the absence or limited availability of technologies in the cost range it provides (that I posted). For instance, Revkin then writes “One of the technologies the scenarios took as necessary was rapid global adoption of systems that capture and store carbon dioxide from power plants — none of which have been tested at anything remotely close to a scale the atmosphere would notice.”

Actually, the IPCC says that if there is no carbon capture and storage, the models suggest it would probably increase costs perhaps by a bit over a factor of two — which, when your projected annual cost is 0.06%, again is super cheap.

But Revkin can’t criticize anybody for supposedly ignoring the fine print or the panel caveats. Because he ignores the large print caveats that the IPCC cost numbers don’t include co-benefits — including the co-benefit of avoiding catastrophic warming.

In fact, neither Roberts nor Revkin provide a shred of evidence that stabilizing at 2°C warming is not super-cheap. All they can do to refute the vast literature on the subject, and a conclusion that was reviewed and signed off on by the leading scientists and governments in the world, is to cite one recent paper — “A critical review of global decarbonization scenarios: what do they tell us about feasibility?” — that doesn’t actually provide any evidence that stabilizing at 2°C is not super cheap.

That paper, which is not strong and contains many dubious assertions (which I’ll discuss in a later post), only demonstrates (in a kind of handwaving fashion) the already obvious fact that stabilizing at 2°C would not be easy. Let’s all just stipulate that statement as “settled science” — in a world where the Koch brothers can spend $889 million dollars in one election cycle to elect people whose goal is to block all climate and clean energy action — as long as we stipulate it’d be easier for humanity to stabilize at 2°C this century than it would be for humanity to struggle to live in a 4°C or higher world, possibly for a thousand years or more.

And let’s also agree that all available evidence is that we could stabilize at 2°C for a cost that is vastly lower than the cost of inaction and that the actions needed to stabilize at 2°C are straightforward (by which I mean clear-cut). Let’s also all agree that there is no evidence we could have a reasonable chance of stopping 4°C warming or more using an R&D-centric strategy that explicitly excludes immediate rapid deployment of all available low-carbon — the preferred strategy of Revkin and, it seems, the paper he cites (though not of Roberts).

Solving climate change is super cheap.