October 6th, 2009

By Barbara Kessler
Green Right Now

Opponents of climate change action say we can’t afford to spend the billions it will take to retool our economy around new energy sources.

But a group of economists says we can’t afford not to.

The network of  economists, called Economics for Equity and the Environment Network (E3), says that lowering carbon emissions to 350 parts per million (from the current 400 parts per million) is not just desirable — it is affordable.

“The warnings about climate change are growing steadily more ominous — but it has not, as a consequence, become impossibly expensive to save the planet. We can still afford a sustainable future,” they note in a new report The Economics of 350: The Benefits and Costs of Climate Stabilization.

Economic activity aimed at reaching the 350 ppm benchmark, would sustain the economy by creating clean energy jobs, fostering innovation and protecting businesses and individuals from the damaging effects of a hotter climate, according to the  report.

The October paper, co-authored by economics researchers across the US, echoes a point made by environmentalists for years, that shifting to new methods now will avert greater costs later.

The E3 economists see it this way:

• It might cost 1 to 3 percent of the world gross domestic product to reach 350 ppm – considered to be a healthy and safe level of carbon dioxide — but the cost of failing to stabilize the earth’s climate over the next 200 years would be much higher.

• Even if the cost to correct the atmosphere fell at the higher end, at 2.5 of GDP, the net effect to household incomes would be barely noticeable.  “Average incomes would take 29 years to double from today’s level, compared to 28 years in the absence of climate costs.”

Efforts to protect the earth, such as reforestation, replacing fossil fuels with clean energy and developing carbon sequestration, would be an insurance policy against drastic and costly climate changes, they say.

“The reason people buy fire insurance is not because they are certain that their house will burn down; rather, it is because they cannot be certain that it won’t,” said Dr. Frank Ackerman of Tufts University and Stockholm Environment Institute, the lead author of the report, in a statement.

“A carbon target of 350 parts per million buys us insurance against catastrophic climate change.”

The E3 report further argues that half-way measures would not be helpful, because failing to firmly reset the economy on a lower carbon path would lead to higher costs:

“We cannot afford a little climate policy, half-measures that would leave us all vulnerable to the immense risks of an increasingly destructive climate. We need a big initiative, a comprehensive global deal on protecting the earth’s climate by rapidly reducing emissions of greenhouse gases. Because the status quo is not sustainable, the most economical choice is to change, as quickly, cost-effectively, and comprehensively as possible.”

The E3 network was formed to help organize information about new economic models that take into account human health and the environment. The network of about 200 economics academics reports that it was formed “to combat misleading junk economics popularized by climate skeptics.”

The report was assembled by Dr. Ackerman and seven other economists from Tufts, the University of California at Santa Barbara, UC at Berkeley, Bard College Dartmouth and Johns Hopkins. (However, the economists’ views do not necessarily represent those of their university.)

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