Global warming has economic consequences

Global warming has economic consequences
By Rachel Cleetus

November 13, 2006

We can wait no longer on global warming.

But if we act now, we can save not only the environment but our economy, as well.

A new report puts a high price tag on unchecked global warming.

Written by a team of top economists and led by former World Bank Chief Economist Sir Nicholas Stern, the report concludes that fighting global warming now could save the world trillions of dollars.

The heat-trapping gases emitted from burning fossil fuels in automobiles and power plants are a major driving force behind global warming. Carbon dioxide, the most abundant heat-trapping gas, stays in the atmosphere for decades, making the Earth increasingly warm.

As a result, by the end of the century there could be a sharp rise in sea level, droughts, floods, storms, crop failures, ecosystem disruptions, threats to public health and other negative impacts from global warming. This could cost as much as 20 percent of the world's total economic output.

What's more, sea level changes, floods and droughts could displace 200 million people by 2050, according to the report.

The good news is that it would take only 1 percent of the world's annual economic output by 2050 to prevent the worst effects of global warming from ever happening.

New technology, increased efficiency and carbon pricing can help keep costs low in the fight against global warming.

Clean, energy-efficient production passes on savings to consumers.

Generating energy from renewable sources, like wind and solar energy, creates more jobs than other types of power. Markets for low-carbon energy products are likely to be worth at least $500 billion per year by 2050, according to the report.

Clean technology would reduce other types of harmful pollution, like smog and mercury. Cutting air pollution could save billions of dollars a year on health-care costs, the report says.

Carbon trading, which has already reached a level of $30 billion a year, could encourage market-based solutions for reducing global warming emissions. The Chicago Climate Exchange is the world's first stock exchange where businesses can trade reductions in global warming emissions.

California and seven Northeastern states are taking serious steps to curb their emissions. In September, California passed a bill that will cut global warming emissions 25 percent by 2020. Northeastern states are working toward capping emissions from the region's power plants at 2005 levels, followed by an additional 10 percent reduction in emissions by 2019.

Bankers, insurers, investors, utility companies and carmakers, recognize the big financial risk climate change poses and are calling for action.

With the stakes so high, we all need to pitch in to do our part.

Personal choices, business decisions, community planning, state laws, federal laws and international treaties should all be part of preventing the worst effects of global warming.

Trillions of dollars in potential savings make the choice to fight global warming the deal of the century.

Rachel Cleetus is a climate economist at the Union of Concerned Scientists (UCS), the leading science-based nonprofit working for a healthy environment and a safer world. She can be reached at pmproj@progressive.org.