THE COST OF INACTION

30 11 2009

An automatic thought process associated with “climate change” usually invokes an image of environmental devastation: a massive ice sheet breaking apart, hurricanes battering the coast of South East Asia, a dusty-drought-stricken prairie.  Climate change does not only encompass the physical response of the environment, but it also encompasses the more discreet, yet inconceivably expansive, damage that may impact the social and economic conditions of our planet.  What is the cost of inaction?  Address the Stern Report— you may be quick to notice that all 700 pages are not necessary— to articulate that the benefits of strong and early action on global climate change will greatly outweigh the costs of inaction. 

The Stern Report predicts that mitigations will cost an average  ~ 1% of the annual global GDP to produce a decline in green house gas emissions, creating stabilization levels of 500-550 ppm CO₂ gas in the atmosphere by 2050.  The social cost of carbon gives a value to costs that are not recognized by the economy such as the cost of increased drought, storms and floods—these impacts are not included in the financial price paid to burn fossil fuels. It is difficult to estimate social costs of carbon with confidence because there are large uncertainties in calculating non-market damages; therefore, the forecasted costs outlines by economists such as Nicholas Stern, may be understated.

 “Comparing the social cost of carbon estimates with the carbon prices for different levels of mitigation shows that the social cost of carbon is at least comparable to, and possibly higher than, carbon prices for even the most stringent scenarios assessed by the IPCC. In other words, the cost of stabilizing greenhouse gas concentrations at low levels tends to be comparable to, or lower than, costs of inaction” (IPCC).

The IPCC addresses the socio-economic cost of climate change using scenario-based methods.  The cost associated with unmitigated CO₂ emissions, coupled with a significant rise in global temperature, and major disturbance to the natural processes of the planet.  Inaction will cost those individuals most susceptible to climate change, living in developing countries and living in environmentally vulnerable locations such as coastlines and river valleys.  Climate change may harm an individual’s health, living standards, employment, culture, home, and daily activities:  especially when resources (money) are not available to buffer a rapid or progressive change.

The costs of climate change are endless; however I feel that one of the largest and most dynamic social and economic costs will result from an influx of environmental refugees.  Refugees fleeing natural crises or populations being forced to move due to dwindling resources.  Hot spots include areas vulnerable to desertification, ice melt, sea-level rise and hurricanes— just to name a few.  Hotspots around the globe that will undoubtedly produce environmental refugees, ranging from thousands to millions include:  Bangladesh; Gobi, China; Alaska U.S; Tuvalu, and Haiti (National Geographic).  It is estimated that 200 million people may be displaced by 2050 due to climate change.  The cost of human life comes into the equation, due to a large number of people unable to flee due to inadequate resources.  The social-political implications of displacement could create massive conflict and economic lapse, as millions of people are without homes and without work.  Those with money may opt to move to larger cities, increasing a blending of cultures and human globalization.  An increasing mixing of different cultures, political and religious beliefs, and resources will create a new social dynamic in the world. 

The Stern Report categorizes major areas of impact:  water, food, health, land and environment.  Damage to any one of these categories will cost the social and economic health of society.  Developing countries are often dependant on agriculture, which is the most climate-sensitive of all economic categories.  Conflict may arise over competition for food, water, land, security and healthcare.  Diseases such as AIDS and Malaria are predicted to become more prevalent and widespread.   Displacement not only stresses the social and cultural framework of society, but it also produces major strain on the physical environment as well.  Surely, even exchanging the social and economic cost of population displacement would greatly offset the costs of mitigation. 

“The poorest developing countries will be hit earliest and hardest by climate change,

even though they have contributed little to causing the problem. Their low incomes

make it difficult to finance adaptation. The international community has an obligation

to support them in adapting to climate change” (Stern Report).

References

The Stern Review on the Economics of Climate Change is a 700-page report released on October 30, 2006 by economist Nicholas Stern for the British governmenthttp://www.hm-treasury.gov.uk/sternreview_index.htm

The Intergovernmental Panel of Climate Change (IPCC) accessed from http://www.ipcc.ch/index.htm

Minard, A. (2007). Global Warming Inaction More Costly Than Solutions? National Geographic News: September 24, 2007.  Retrieved October 2009 from: http://news.nationalgeographic.com/news/2007/09/070924-global-warming.html

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