Climate Change

[drplokta]

We keep seeing scary-looking estimates of the cost of climate change -- most recently an estimate here that it could be costing the UK £42 billion per year by 2080. What all these estimates have in common is that, while they look scary, they are in fact extremely small numbers, and indicate that we should do nothing about climate change.

Let's take that £42 billion per year by 2080 as an example. The UK's GDP is currently a little over £1 trillion per year. But if we assume 2% real growth in the economy per year over the next 74 years, then in 2080 it will be over 4.3 billion, and that £42 billion per year will be less than 1% of the economy, or equivalent to delaying economic growth by less than six months. Put another way, the effect of climate change will be to reduce average growth over the period from 2.00% to 1.99%, so it doesn't seem worth spending more than .02% of current GDP, or £200 million per year, to do anything about it.

Comments

[strangedave.livejournal.com]

FWIW, previews of the Stern report (http://www.abc.net.au/news/newsitems/200610/s1776304.htm) indicate the cost of dealing with climate change at about 1% of GDP, the cost of doing nothing at 5-20% of GDP.

Perhaps the answer is we just needed better economists to look at all the costs, many of which (such as ongoing costs from dislocated refugees) are hard to directly correlate to climate change, but very real.

Stern is a pretty credible economic figure, and as John Quiggin (http://johnquiggin.com/index.php/archives/2006/10/30/stern-report-previewed/) notes, the sources of the few (so far) critical responses on the report (such as the standard Exxon funded shills) are such as to enhance its credibility. As far as arguments from pure economics goes, the ball in the climate change denialist court, and I doubt they will be able to hit it back over the net.

So I'd say you are probably wrong, not because your argument is wrong, but because better economists came up with better numbers.