Tag Archives: greenhouse gas emissions

The Staggering Costs of Climate Change

DSC_1793Researchers at the University of Cambridge and Erasmus University in the Netherlands published a report in the journal Nature yesterday that outlines the economic impact of climate change in the Arctic. According to the report, methane released by melting permafrost in the Arctic—which unlike the loss of sea ice, rising ocean levels, the vulnerability of Arctic species like the polar bear—have largely been ignored in consideration of the impact of climate change. However, the report cautions that the impact of methane releases could be massive.

Much of the attention paid to date to methane in the Arctic has focused on the development and extraction of new resources from land uncovered as a result of retreating polar icecaps. The Arctic, the report notes, is home to about 30 percent of the world’s undiscovered natural gas and 13 percent of its undiscovered oil, and climate change may make those resources more accessible for extraction. According to Lloyd’s of London, the oil and natural gas alone could be worth up to $100 billion. The race for these resources has already triggered increased tensions over control of Arctic resources, including an effort by the Russian government to plant a flag on the Arctic sea floor, and increasing tensions between the US and Canadian governments over control over Arctic sea lanes.

But scientists warn that the economic costs associated with climate change in the Arctic could dwarf any economic benefits from newly accessible resources. Indeed, the report in Nature noted that,

We calculate that the costs of a melting Arctic will be huge, because the region is pivotal to the functioning of Earth systems such as oceans and the climate. The release of methane from thawing permafrost beneath the East Siberian Sea, off northern Russia, alone comes with an average global price tag of $60 trillion in the absence of mitigating action — a figure comparable to the size of the world economy in 2012 (about $70 trillion). The total cost of Arctic change will be much higher.

The problem, of course, is that climate change represents the classic collective action problem, where the benefits (gains from extracting new Arctic resources, for example) are captured by a relatively small group while the costs are borne globally. Indeed, it is widely acknowledged that the majority of the impact of climate change will be borne by the developing world—the countries which have been least responsible for the greenhouse gas emissions that have driven climate change in the first place.

What do you think? Can a political solution to climate change be achieved before the climate is irreversibly altered? Or should efforts to address climate change shift from prevention and mitigation to adaption? Take the poll or leave a comment below and let us know what you think.

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Climate Change and the Logic of Collective Action

The Atlantic’s Christopher Mims and Stephanie Gruner Buckley this week published “5 Charts About Climate Change That Should Have You Very, Very Worried.” They note that recent reports by the World Bank and the Central Intelligence Agency provide further evidence of the threat posed by climate change. These threats range from rising sea levels, severe flooding, drought, and fire to terrorism, civil war, and massive food shortages. The picture they paint is bleak.

Indeed, this has been a trend in recent coverage of climate change. Indeed, the its publication, the World Bank said its aim was to shock people into action by sharing the devastating scenarios that accompany climate change. Blogging at Huffington Post, Edith Lederer argues that Superstorm Sandy might motivate greater action on the part o the United States in addressing climate change.

US leadership would likely be welcomed. A new round of climate change talks are set to begin in Doha next week, and there is hope that—unlike in previous rounds—negotiators may be able to reach agreement on legally binding greenhouse gas reductions by 2015. Without active US participation, agreement appears unlikely, and any agreement would likely be ineffective. At the same time though, as Jordan Weissmann points out at The Atlantic, the United States alone can’t stop climate change. Chinese participation is also vital.

And this gets at the heart of the issue. The scare tactics of the World Bank and others is unlikely to compel significant movement on the part of negotiators. Two fundamental principles mitigate against the possibility.

First, global climate change is a classic example of a collective goods dilemma. All states will benefit from an agreement on climate change, regardless of whether or not they cut their own emissions. Given this, there is little incentive for states to agree to cut their own greenhouse gas emissions. Rather, the incentive is to free ride on the efforts of other states to cut theirs. But as each state responds to these incentives in the same way, the effectiveness of any agreement is undermined, and the collective well-being of all peoples (and of each individual state) is undermined.

Second, the costs and benefits of greenhouse gas emissions is unevenly distributed. While the global north is historically responsible for the vast majority of greenhouse gas emissions, the global south bears the disproportionate cost associated with climate change. Again, this makes it less likely for countries like the United States to cut their greenhouse gas emissions.

Despite a handful of voices claiming the contrary, the problem with reaching agreement on climate change has never been scientific uncertainty about the impact of climate change. Rather, it’s about interests and trade-offs  Reaching agreement on climate change thus requires rethinking the cost-benefit analysis and the payoff structure for action or inaction.

What do you think? Will negotiations to reduce greenhouse gas emissions and address climate change be successful? Or is the bleak scenario painted by the World Bank and others likely to emerge? Take the poll or leave a comment below and let us know what you think.