In 2006, the Stern Review firmly developed the evidence that global warming will cost the world's economy far more than the cost of taking mitigative actions, but almost a decade later, the entire GOP presidential field remains deep in denial.
At the second debate, in Simi Valley [transcript], CNN's Jake Tapper framed the question in most non-threatening manner a GOP candidate could hope for, citing Ronald Reagan's secretary of state, George Shultz, who drew a direct parallel to how Reagan responded to the threat to the ozone layer and used the framing of “an insurance policy,” but could not get anyone to agree, starting with current media heartthrob Marco Rubio:
TAPPER: Shultz says Ronald Reagan urged skeptics in industry to come up with a plan. He said, do it as an insurance policy in case the scientists are right. The scientists were right. Reagan and his approach worked.
Secretary Shultz asks, why not take out an insurance policy and approach climate change the Reagan way?
RUBIO: Because we're not going to destroy our economy the way the left-wing government that we are under now wants to do.
But aside from the fact that Democrats are much better for the economy, a new study from Stanford and UC Berkeley, published in Nature, finds that global warming's economic costs will be much larger than previous estimates have predicted. Rather than being alarmists, climate scientists and economists who study the matter have previously underestimated how damaging global warming will be if left unchecked.
"What that means for policy is that we should be willing to spend a lot more on mitigation than we would otherwise,” lead author Marshall Burke of Stanford's Department of Earth System Science said in a press release. “The benefits of action on mitigation are much greater than we thought, because the costs of inaction are much greater than we thought."
In short, Marco Rubio and the rest of the GOP crowd has it exactly backwards, and Lord Nicholas Stern himself agrees. “This paper recognizes that climate change could have impacts that increase very steeply with rising global average temperature,” Stern told the Guardian. “This is an advance on other previous studies [which have] made severe underestimates of the economic effects of unmanaged climate change.”
"Unmitigated warming is expected to reshape the global economy by reducing average global incomes roughly 23% by 2100 and widening global income inequality, relative to scenarios without climate change," the paper's abstract summarized. The paper itself adds, "The slope of the damage function is large even for slight warming, generating expected costs of climate change 2.5–100 times larger than prior estimates for 2oC warming, and at least 2.5 times larger for higher temperatures.”
In addition, “We show that substantial losses can occur even for end-of-century temperature increases of less than 2oC,” an accompanying FAQ document says.
“This does not mean that the world will be poorer in 2100. It almost certainly will not,” Burke wrote in a blog post for the scientific community. “It means that it will be less rich than it would have been had temperatures not warmed.”
However, even that could be too optimistic, given the limits of their methods. “Importantly, our estimates mechanically do not include the potential future effects of stuff we have not observed historically (e.g., sea level rise),” Burke added, “nor do they contain non-marketed things we care about that do not show up in GDP (e.g., polar bears).” In short, this represents a conservative estimate of what global warming will cost in the decades ahead.
The study examined 166 countries between 1960 and 2010, from which researchers identified an optimal average annual temperature of 13 degrees Celsius, coinciding with peak productivity—about that of San Francisco's Bay Area (Beat poetry, the Grateful Dead, Silicon Valley, the West Coast offense; suddenly it all makes sense). They compared countries' growth rates in cool versus warm years, filtering out a variety of episodic impacts (such as oil shocks).
As seen on this map, most of Europe (except the south), Canada and Russia are projected to see increased economic growth, as their temperatures are below the global optimum, but the vast majority of the world's people will be losers. This includes major economies like the US (-36 percent), China (-42 percent), and Japan (-35 percent), emerging economies like India (-92 percent) and Brazil (-82 percent), almost all of Africa and Latin America, and even oil-rich nations such as Saudi Arabia (-96 percent), Iraq (-93 percent), Iran (-58 percent), Kuwait (-96 percent) and Oman (-94 percent).
Remarkably, the study found that the impact of warmer temperatures had been fairly consistent over this time. This strongly suggests that technological advances won't help withstand the ill effects of rising temperatures, as some have hoped or argued in the past. As explained in the supporting FAQ:
If using advanced technologies insulated our economies against the effects of temperature, then we would expect (1) rich countries would be less sensitive than poor countries and (2) we should be getting less sensitive with time. We check for both of these effects in the data and find that neither appears to be true. Instead, we find that the effect of temperature is similar across rich and poor countries, and the effect of temperature today is almost identical to its effects in the 1960's.
The paper's approach is innovative, but not unique. An earlier study involving one of the co-authors, Solomon Hsiang of UC Berkeley's Goldman School of Public Policy, used a similar approach to analyze county-level data in the U.S. “We find that total personal income per capita is highest when 24-hour average temperatures are between 9-15oC (48.2-59oF) and declines substantially on hotter days,” it said. “This average effect is driven by lost income during warm and hot weekdays and is largely unchanged between 1969 and 2011.” The fact that such effects were found in the world's most advanced economy clearly showed that global warming's impacts were not something we could easily grow out of. The current study adds a much larger body of data supporting the same conclusion.
“In the past, many economists thought that impacts on agriculture was the primary pathway through which climate change would influence the economy, probably in part because crops are obviously sensitive to temperature and to rainfall,” the FAQ explained. But other impacts have become increasingly clear, most notably “many labor-intensive sectors show sensitivity to high temperatures... probably because individual people working in these sectors work less and work less productively when temperatures get too hot.”
There are also impacts on human health and mortality rates, increased spending for air conditioning and “increases in various types of human violence,” all of which can reduce economic productivity. “We think it is likely that the reduced productivity of workers and agriculture are playing a central role in our results,” the FAQ says, “although our findings represent the cumulative effect of all of these varying impacts recombining in the economy.”
“This relationship we have uncovered is almost like a law,” Hsiang told the Guardian. “Over the last 50 years, this relationship between how temperature fluctuates and how economies perform hasn’t changed a bit.”
What's more, “The effect of climate change is to massively increase global income inequality,” he said—a cumulative effect that will become massive over time. “Very slowly, economies start performing worse and worse [as temperature rises], but over time those little differences add up, so by 2100 there is a huge wedge between where we could be and where we find ourselves.”
That in itself could make things even worse. The projections are based on temperature differences within a relatively restricted range. Additional factors could well enter the equation to make things even worse. There are no model provisions for crossing tipping points, where runaway changes become self-reinforcing. In short, this is anything but a worst-case scenario report. To the contrary, it's telling us just how bad the best-case scenario is likely to be—which is why it's such a strong argument for spending money now to avoid it.