Net-Zero Emissions Costs 16% of GDP Per Year; Climate Change at Most Costs 4% of GDP Per Year

(p. C1) For decades, climate activists have exhorted people in the wealthy West to change their personal behavior to cut carbon emissions. We have been told to drive less, to stop flying and, in general, to reduce consumption—all in the name of saving the planet from ever higher temperatures.

The Covid-19 pandemic has now achieved these goals, at least temporarily. With the enormous reduction in global economic activity, it has been as if people around the world suddenly decided to heed the activists and curtail their travel and consumption. Largely as a result of the crisis, the International Energy Agency recently concluded, “global CO2 emissions are expected to decline by 8% in 2020, or almost 2.6 [billion tons], to levels of 10 years ago.”

It’s an unprecedented and impressive drop in emissions—by far the biggest year-to-year reduction since World War II. Unfortunately, it will have almost no discernible impact on climate change. Glen Peters, the research director at the Center for International Climate Research in Norway, estimates that by 2100, this year’s enormous reduction will bring down global temperatures by less than one five-hundredth of a degree Fahrenheit.

. . .

(p. C4) Sadly, the vast majority of the actions that individuals can take in the service of reducing emissions—and certainly all of those that are achievable without entirely disrupting everyday life—make little practical difference. That’s true even if all of us do them.

. . .

Achieving global “net zero” emissions in three decades, as a growing number of activists and politicians advocate, would require the equivalent of a series of ongoing and ever-tightening lockdowns until 2050.

. . .

William Nordhaus of Yale, who in 2018 was awarded the first Nobel Prize for work in climate economics, has tabulated all of the estimates of climate-related economic damages from the UN’s Intergovernmental Panel on Climate Change and peer-reviewed studies to determine the total impact of different levels of global temperature increases. He found that, by 2050, the net negative impact of unmitigated climate change—that is, with current emissions trends unabated—is equivalent to losing about 1% of global GDP every year. By 2100 the loss will be about 4% of global GDP a year.

For comparison, what would it cost to reach net-zero by 2050, through cutting emissions and mandating new energy sources? So far, only one country, New Zealand, has commissioned an independent estimate. It turns out the optimistic cost is a whopping 16% of GDP each year by 2050. That projected figure exceeds what New Zealand spends today on social security, welfare, health, education, police, courts, defense, environment and every other part of government combined.

As this simple comparison suggests, suffering a 16% loss of GDP to reduce a problem estimated to cost 1% or even 4% of GDP is a bad way to help. That is especially true for the many parts of the world that are still in the early stages of economic development and desperately need growth to improve the lives of their impoverished populations.

For the full commentary, see:

Bjorn Lomborg. “Lockdowns Highlight The Climate Challenge.” The Wall Street Journal (Saturday, July 11, 2020): C1 & C4.

(Note: ellipses added.)

(Note: the online version of the commentary has the same date as the print version, and has the title “The Lockdown’s Lessons for Climate Activism.” Where there are slight differences in wording between the versions in the passages quoted, the online version appears above. The online version does not list an author. I cite James Barron, who is listed as the author in the print version.)

Lomborg’s commentary, quoted above, is related to his book:

Lomborg, Bjørn. False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet. New York: Basic Books, 2020.

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