Fighting climate change makes financial sense
Some believe that with the current economic crises we can’t afford to spend extra money on climate change mitigation or on the protection of the environment. However various recent studies show exactly the opposite.
In today’s article will see how and why this is possible. This occurs just a few days after I wrote on how investors demand strong climate change action and how Big Business steps into climate change mitigation
More and more understand that fighting climate change harder than what we are currently doing would not only prevent overwhelming expenses but would also enable us to make billions globally.
In September the Institute for Policy Integrity calculated that the US Climate change bill – known as the H.R. 2454 American Clean Energy and Security Act of 2009 and also known as the Waxman-Markey bill – would have benefits outweighing nine to one the financial costs.
Yes you read it right ; 9 to 1 ! The authors used data from the local Environmental Protection Agency (EPA) justify this staggering finding by taking into account the social cost of carbon.
As the authors note in the executive summary :
The estimated benefits do not include a significant number of ancillary and un-quantified benefits, such as the reduction of co-pollutants (particularly sulfur dioxide and nitrogen dioxide), the prevention of species extinction, and lower maintenance costs for energy infrastructure.
Due to those limitations, the benefits estimates should be considered to be very conservative. IPI calls on EPA to conduct a full, formal analysis of the benefits of climate legislation, including whether alternate and more stringent climate policies might be even more cost-benefit justified.
Please refer to the full report (.pdf format, 1.52 Mb) for more details.
Another report by the United Nations Foundation and the Center for American Progress that was just released shows that adopting various drastic measures on climate change would save $14 billion by 2020.
Among these measures are slowing deforestation, improving worldwide energy efficiency, and working towards a global renewable energy standard of 20%. All this would cut global emissions by 13 gigatonnes of CO2 emissions a year.
Here goes the summary :
Achievable gains in energy efficiency, renewable energy, forest conservation, and sustainable land use worldwide could achieve up to 75 percent of needed global emissions reductions in 2020 at a net savings of $14 billion.
These actions, along with additional investments in climate adaptation, would deliver a wide range of economic, security, and environmental benefits in developed and developing countries.
For more, please check out the full report (.pdf format, 600 ko)
However another recent report from Mc Kinsey shows that doing nothing on climate change would have dire consequences on our economies. As TreeHugger notes :
“By 2030 climate risks could cost nations 19% of GDP, with developing nations most vulnerable. The good news: Existing cost-effective measures exist that can prevent 40-68% of expected economic losses.”
To learn out more, please refer to the full study. : Shaping Climate Resistant Development
This is not the first time we discuss about how climate change mitigation does financial sense. Indeed, Mc Kinsey wrote various report on the topic.
One was on how energy efficiency could save America $1.2 trillion and another on climate change mitigation in a global scale which noted last year that we could halve our carbon dioxide and other greenhouse gases emissions is possible by 2030.
To conclude, I strongly recommend you reading What If Climate Action Actually Accelerates Economic Growth ? by Alex Steffen.
As always, I look forward to reading your opinion on what will surely be a hot topic in December in Copenhagen.