The economic cost of climate change is vastly greatly than previously estimated, providing justification for even expensive mitigation measures, new research finds.
The economic damages, or "social cost," from carbon dioxide emissions could include property damages from flooding or loss in agricultural yields, as the U.S. EPA explains.
While the federal government placed a price tag of $37 per additional ton of carbon dioxide emitted, study co-author Frances Moore, a PhD candidate in the Emmett Interdisciplinary Program in Environment and Resources in Stanford's School of Earth Sciences, said the price is really $220 per ton.
By using a modified model to take into account climate change's expected impact of slowing economic growth, Moore and her co-author, Delavane Diaz, a PhD candidate in the Department of Management Science and Engineering at Stanford's School of Engineering, found that the decrease in growth "has a permanent effect that accumulates over time, leading to a much higher social cost of carbon," Moore stated.
"For 20 years now, the models have assumed that climate change can't affect the basic growth rate of the economy," she said. "But a number of new studies suggest this may not be true."
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Diaz stated that this higher cost—six times greater than previously assumed—could make governments see the economic benefits of greater efforts to slash greenhouse gas emissions.
"If the social cost of carbon is higher, many more mitigation measures will pass a cost-benefit analysis," Diaz said. "Because carbon emissions are so harmful to society, even costly means of reducing emissions would be worthwhile."
The assumption is that tackling climate change while continuing economic growth is achievable as well as desirable. This is an approach criticized by some, including author Naomi Klein, who say that keeping the planet livable necessitates a shift away from a growth-based paradigm.
Speaking to BillMoyers.com in September about her newest book, Klein said:
As Michael Mann, the climate scientist at Penn State, said, there’s a “procrastination penalty” when it comes to emissions. All this time that we’ve been failing to respond, emissions have been going up, and they stick around, they accumulate. Because we have waited so long, we now need to cut our emissions so deeply and rapidly that it does present a challenge to economic growth. This is why I called the book Capitalism vs. the Climate – because I do think the logic of economic growth is very much at the heart of this system. Maybe it is possible to have a form of capitalism that doesn’t focus on growth, but it’s really hard to pry apart the capitalism that we have from the idea of endless growth.