Is a climate change cure worse than the disease?

TWO years after the Paris climate agreement was signed, the French capital this month again attracted the world’s good and great, who gathered for President Emmanuel Macron’s One Planet Summit.

In turns blasting US President Donald Trump for withdrawing from the Paris accord and telling each other that it remains on track, politicians formed a self-congratulatory huddle with celebrity campaigners and business leaders.

We should treat such smug bonhomie with caution. Goodwill isn’t enough to stop climate change, and history is littered with well-meaning policies that turned out to be unhelpful, or even worse than the problems they were meant to address.

Often, policy flaws become apparent only in retrospect. To identify them in real time, we need to be able to undertake a calm analysis of costs and impacts. No topic requires this more than climate change. Consider this month’s summit in Paris, where attention focused either on the Trump administration’s absence, or on other world leaders’ defiance of him. Nowhere have we heard about the Paris agreement’s actual costs and effects.

Economic science helps us establish the scale of the problem. The Intergovernmental Panel on Climate Change, the UN’s climate panel, estimates that in about 60 years, global warming will cost the planet between 0.2 percent and 2 percent of GDP. That’s a problem, but it’s not the end of the world.

Right now, the net cost of global warming is actually close to zero. This seems untrue, because we hear an onslaught of terrible climate-related news. But we don’t get the full picture.

A drought in Syria understandably makes news. But global warming overall means more precipitation.

Similarly, we hear concern that tropical forests are being stripped. But while this deserves attention, the bigger story is that, because more carbon dioxide fertilizes vegetation, climate change has actually increased the world’s green matter (plants of all sorts) since 1982 by the equivalent of an entire continent.

The best estimates thus show that global warming right now has about a zero net cost.

That will rise to 2 percent in a half-century, and to 3-4 percent early in the 22nd century, if we don’t act.

Cheaper options

But the climate policies lauded in Paris are essentially high-cost, low-effect gestures. The European Union will devote 20 percent of its budget this year to climate-related action. Taking into account the total cost to the economy, the EU’s bill will likely be around €209 billion (US$240 billion).

The benefit will be vanishingly small. Accounting for the EU’s commitments to reduce CO2 emissions under the Paris accord up to 2030, my peer-reviewed analysis shows that in the most optimistic scenario, emissions targets, fully achieved and adhered to throughout this century, would prevent just 0.053 degrees Celsius of global warming by 2100.

That small impact is not a sufficient reason to dump the EU’s emissions-reduction policy. But it should force us to consider whether the cure is costlier than the disease — and ask what other approaches might be better.

Another peer-reviewed study shows that each dollar spent on EU climate policies will generate a total long-term climate benefit of just three cents.

And, despite the cheer coming from France, the Paris accord is just as off-balance: at a US$1-2 trillion annual cost, the United Nations itself estimates that it is on track to achieve one percent of what would be needed to keep temperature rises under 2 degrees Celsius.

We need smarter, cheaper options.

Countries should ease up on their current, inefficient climate policies and instead increase spending on green R&D. Only innovation can shift the price of future green energy below fossil fuels, thereby impelling everyone to switch.

Bjørn Lomborg is Director of the Copenhagen Consensus Center and a visiting professor at the Copenhagen Business School. Copyright: Project Syndicate, 2017. www.project-syndicate.org