From Watts Up With That?

Essay by Eric Worrall

“… economic modelling has often suggested that temperature increases well above … the 2 °C target … would result in higher total welfare …”

The global economics of climate action

Jarmo Kikstra
Researcher (IACC, S3, TISS)

Bettina Greenwell
Communications Officer (CER)

23 March 2023

Climate change has serious consequences for the environment and people and is a major threat to economic stability. A new assessment reviews innovative, integrated research that underpins the economic case for strong near-term climate action.

Economic studies analyzing the costs and benefits of ambitious and rapid climate action have struggled to build a strong case due to methodological difficulties in trying to quantify all climate impacts. A new analysis looks at a pioneering approach to project economic impacts along climate mitigation pathways, finding that near-term emissions reductions are globally economically optimal, with central estimates for the “optimal warming” around 1.8-1.9°C by 2100.

Cost-benefit analyses of climate change impacts generally fall in one of two groups. The first group uses statistical methods to relate climate and weather patterns to economic productivity. While there have been improvements in this area, such methods remain a “black box” – it is not possible to easily relate economic productiveness to heat- or drought-related mortality. The second group adds up various climate impacts calculated in a more transparent and detailed manner, but is unable to quantify all impacts as well as all the interactions between them over time.

The assessment, published in Nature Climate Change, finds that new research takes a pioneering approach to build on previous work with increased detail incorporating some of the interaction between sectors, improving upon the methods of previous studies. …

…Read more: https://iiasa.ac.at/news/mar-2023/global-economics-of-climate-action

If you visit the article above and click the link under the reference section, that takes you to an otherwise heavily paywalled article in Nature.

Strong climate action is worth it

Jarmo S. Kikstra & Paul Waidelich

An immediate and rapid reduction in global emissions is required for many reasons. Integrated research supports the economic case for strong near-term climate action, even before accounting for expected negative impacts on biodiversity, health and tipping points.

What is modelled as economically optimal may very well not be in line with a future that is societally desirable. With every bit of additional global warming, especially at warming levels of higher than 1.5 °C, peo-ple living in small island developing states and low-lying coastal areas are at increased risk of facing displacement, more of the world’s coral reefs are expected to be lost, and the triggering of multiple tipping points becomes more likely. Based on multiple lines of evidence, research-ers have, therefore, argued that limiting global warming to 1.5 °C outweighs the cost. By contrast, forward-looking economic modelling has often suggested that temperature increases well above the Paris Agreement target (and previously the 2 °C target in the Cancun Agree-ments) would result in higher total welfare (Fig. 1). Writing in Nature Climate Change, Kaj-Ivar van der Wijst and colleagues3 report a new way to project economic impacts along climate mitigation pathways …Read more: https://www.nature.com/articles/s41558-023-01635-2.epdf

If you hit a paywall when clicking the link above, visit the first article and click the reference link, which led me to a non paywalled copy.

I wish the researchers had made it clearer which economic model suggested “optimal” benefit from global warming above 3 C.

Despite the intriguing suggestion that substantial warming might be a net economic benefit, the authors appear to argue purely economic models to not account for biodiversity losses, tipping points, and impacts on poor people. Nevertheless I see this as the beginning of a retreat from the 1.5C trenches.

What prompted this apparent retreat from 1.5C? We can only speculate. Perhaps strong indications we have already passed 1.5C global warming, and nothing bad has happened, have prompted this rather embarrassing effort to regroup around 1.8-1.9C.

One thing I think we can safely predict. If 1.8-1.9C global warming is unequivocally breached, I doubt we will see any climate damage, but we can expect a massive rise in climate gobbledygook and double think. Of course, regardless of what happens to global temperature, the demand for mitigation and research funding will remain as strong as ever.