The White House Council of Economic Advisers has released a report that examines the economic consequences of delaying the implementation of policies aimed at combating climate change and reducing greenhouse gas (GHG) emissions, and emphasizes the urgency of taking policy action on climate change.
29 July 2014: The White House Council of Economic Advisers has released a report that examines the economic consequences of delaying the implementation of policies aimed at combating climate change and reducing greenhouse gas (GHG) emissions, and emphasizes the urgency of taking policy action on climate change.
The Council of Economic Advisers’ report highlights that taking immediate action substantially reduces the cost of achieving climate targets. It points to actions that will reduce investments in high-carbon infrastructure and stimulate the development of low- and zero-emissions technologies. The report further indicates that net mitigation costs increase, on average, by approximately 40% for each decade of delay.
The report further notes that climate change from delayed action leads to large estimated economic damages. For example, if delaying action causes global temperature increase to stabilize at 3°C, instead of 2°C, above preindustrial levels, annual additional damages of 0.9% of global output will be incurred; which would equal to US$150 billion in the US in 2014. These costs are incurred year after year due to permanent damage caused by the additional climate change resulting from the delay.
The report also highlights that the possibility of abrupt, large-scale, catastrophic climatic changes increases the need to act. Such large-scale events, including the melting of the West Antarctic ice sheets and the release of methane through thawing of permafrost, are irreversible and could have massive global consequences and costs. These events are associated with a “tipping point” or temperature threshold beyond which a transition or change becomes inevitable. Finally, the report says that enacting meaningful change in climate policy is akin to purchasing climate insurance. For example, paying mitigation costs now not only reduces the odds of a large-scale catastrophic event, it can also be seen as an investment that leads to cleaner air, energy security and other benefits that are difficult to monetize. [Council of Economic Advisors Press Release] [Publication: The Cost of Delaying Action to Stem Climate Change]