The cost of action

Allianz Knowledge Partnersite: Those that are still amazed by the estimated 4 trillion dollars lost since the financial meltdown in 2008, will have to get used to even bigger losses: Climate change could destroy more than 20 percent of annual global GDP, about 12.5 trillion dollars in 2008 terms. The daunting numbers stem from the Stern Review on the Economics of Climate Change published in 2006, a report now considered even by its authors to be overly optimistic.

Now the good news: It will cost just “two to three percent of global GDP per annum” to stabilize greenhouse gas concentrations in the atmosphere and avoid the worst effects of runaway climate change, says Alex Bowen, senior economist on the Stern team. That is about the same proportion of global GDP that all the world's governments spent on the military in 2008.

… The problem is the timescale. The costs of climate change are relatively modest in the near term but increase with time. The truly colossal costs will be felt not by the current generation of policymakers, businesspeople, and consumers but by their grandchildren. The trick is to persuade people that future generations’ wellbeing is worth paying for now.

In the meantime, we have an economic recession to deal with, jobs to save, economic growth and social wellbeing to preserve. Opponents of a de-carbonization strategy argue that we cannot afford 2 to 3 percent of GDP to reduce greenhouse gas emissions. But recent research suggests that a low-carbon economy and climate change mitigation efforts need not catapult us back to the dark ages….

Tractor repair 1943. Driver Benji Iguchi, Mechanic Henry Hanawa, Manzanar Relocation Center, California. ("Relocation Center" is a euphemism for the concentration camps where Japanese Americans were rounded up and imprisoned during World War II.)