IPCC WG III on mitigation of climate change had this to say on the costs of a forceful 2 degree C strategy (Summary for Policymakers, page 15, my italics, their godawful prose):
Scenarios in which all countries of the world begin mitigation immediately, there is a single global carbon price, and all key technologies are available, have been used as a cost-effective benchmark
for estimating macroeconomic mitigation costs … Under these assumptions, mitigation scenarios that reach atmospheric concentrations of about 450 ppm CO2eq by 2100 entail losses in global consumption – not including benefits of reduced climate change as well as co-benefits and adverse side-effects of mitigation (footnote 19) – of 1 % to 4 % (median: 1.7 %) in 2030, 2 % to 6 % (median: 3.4 %) in 2050, and 3 % to 11 % (median: 4.8 %) in 2100 relative to consumption in baseline scenarios that grows anywhere from 300 % to more than 900 % over the century. These numbers correspond to an annualized reduction of consumption growth by 0.04 to 0.14 (median: 0.06) percentage points over the century relative to annualized consumption growth in the baseline that is between 1.6 % and 3 % per year.
This has been summarised by retail commentators, including yours truly, as an estimate that “2 degree mitigation will cost 0.06% of GDP growth, or “nothing” within the margin of error.”
But it’s wrong. What is the point of an estimate of “macroeconomic mitigation costs” that excludes a substantial part of them, viz. the co-benefits and co-costs? One way forward is to try for a comprehensive estimate in welfare terms, including biodiversity, long-tailed risk of civilisational catastrophe, psychic burdens of anxiety, corrections for inequality, heightened risk of conflict, etc. This is pretty much impossible. Or you limit yourself to a GDP estimate, with its well-known flaws and the merits of familiarity – in which case you must put in all the GDP components. The whole point of mitigation is to prevent the damage from climate change. Not all of this is captured in GDP, but a lot of it is. Leaving out the avoided damage is a fatal flaw in the IPCC’s estimate of net costs. It’s much, much too high. Continue Reading…