On Tuesday, the White House issued a new report on the financial cost of delaying climate action. The move is intended to counteract business and political groups that argue environmental regulations are not economically feasible.
Even before Obama announced his plan to reduce carbon emissions by 30 percent from 2005 levels, he was receiving significant pushback from the coal industry. “We fully expect that whatever comes out will be overly stringent, and will be something that is not good for American consumers or businesses,” said Laura Sheehan, spokeswoman for the American Coalition for Clean Coal Electricity.
That was in May. The furor only increased after the official announcement. Robert Murray, CEO of the largest coal producer in the country, quickly threatened to sue the EPA. Murray, an avowed believer in global cooling, opposed the science behind the carbon reduction initiative. On a personal level, he opposed the initiative because it would affect “[t]housands of American coal mining and related jobs,” the livelihoods of his employees.
Yet there is the cost of dealing with climate change now and the cost of dealing with climate change later. And now, the White House report argues, is the better time.
“Each decade we delay acting results in an added cost of dealing with the problem of an extra 40 percent,” said Jason Furman, chairman of Obama’s Council of Economic Advisers. “We know way more than enough to justify acting today.”
If the average global temperature rises above 2 degrees Celsius in the coming decades, the cost will be enormous. A 3C rise would strip the global economy of approximately $150 billion per year, according to the report. A 4C rise would cost 3.1 percent of global GDP. “The cost,” said Furman, “ramps up potentially astronomically to the point that even if you want to you couldn’t actually stabilize the temperature.”
The White House’s latest report, “The Cost of Delaying Action to Stem Climate Change,” comes one month after the publication of “Risky Business,” a bipartisan report commissioned by former New York City Mayor Michael Bloomberg.
Co-author of “Risky Business” and co-chairman of the Council on Foreign Relations, Robert E. Rubin, further explains the cost of climate inaction in a recent column for the Washington Post. To cover the environmental impacts of more extreme weather, the government will be forced to raise taxes, increase the deficit and cut spending on defense and public investment.
“When it comes to the economy, much of the debate about climate change — and reducing the greenhouse gas emissions that are fueling it — is framed as a trade-off between environmental protection and economic prosperity. Many people argue that moving away from fossil fuels and reducing carbon emissions will impede economic growth, hurt business and hamper job creation.
“But from an economic perspective, that’s precisely the wrong way to look at it. The real question should be: What is the cost of inaction? In my view — and in the view of a growing group of business people, economists, and other financial and market experts — the cost of inaction over the long term is far greater than the cost of action.”
To read the full White House report, click here.