Towards a realistic and comprehensive estimate of the future costs and damages of #globalheating

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In response to a review by Joseph Stiglitz of his new book, Bjorn Lomborg posted an article in which he defends his position. Lomborg’s entire argument for deprioritizing and effectively delaying climate change mitigation rests on the premise that the future costs and damages of climate change are not as high as to justify the costs of decarbonizing the global economy. While the costs (and potential economic gains) of decarbonization are a separate matter to discuss, I want to make the case for a more realistic and comprehensive estimate of the possible costs and damages of climate change.

First of all, in order to do justice to the long-term nature that is characteristic of humanity’s disruption of the earth-system equilibrium, it is absolutely critical that we apply a time horizon of at least multiple decades, like perhaps 40–80 years. This means that we will need to take into account the damages and impacts that are more likely to affect today’s children than us 20th century born generations. As human parents, whether in a concrete or an abstract sense, we all feel a responsibility towards them that exceeds any ideological constraints. That said, there are a couple of new developments and insights to consider:

1) It looks like the original damage function used by William Nordhaus was methodically flawed and led him to tragically underestimate the economic losses of >2 degrees C warming scenarios by 2100. Even when he received his award in Stockholm, he still believed that a 3 degrees C warming scenario was “optimal” from a cost-benefit point of view. Steve Keen is making a valid point here: https://www.youtube.com/watch?v=vwwvZ8g5eHE (https://evonomics.com/steve-keen-nordhaus-climate-change-economics/)

Recently, the damage function has been updated with more robust inputs based on the state of the art of climate science, so that substantially increased economic loss estimates have become available:

https://www.nature.com/articles/s41467-019-13961-1; https://www.nature.com/articles/s41558-020-0833-x

2) Even with those updated economic loss estimates, it remains generally difficult to monetize the additional ethical/utility losses — the negative impacts of human suffering, of social unrest, of mass displacements, biodiversity losses. Various “missing economic risks in assessments of climate change impacts” are explored here: http://www.lse.ac.uk/GranthamInstitute/publication/the-missing-economic-risks-in-assessments-of-climate-change-impacts/

In addition, there is a risk of losses in terms of our cultural achievements, of our democratic freedoms and human rights to increasingly likely attempts by desperate governments to withstand the pressures of unmitigated climate change and to keep up social order by autocratic means. A taste of the kind of disruptions human societies will be forced to deal with absent effective mitigation offers this study about the “Future of the human climate niche” https://www.pnas.org/content/117/21/11350 „We demonstrate that depending on scenarios of population growth and warming, over the coming 50 y, 1 to 3 billion people are projected to be left outside the climate conditions that have served humanity well over the past 6,000 y. Absent climate mitigation or migration, a substantial part of humanity will be exposed to mean annual temperatures warmer than nearly anywhere today.”

3) The damage function used by Nordhaus didn’t take into account the emerging insights regarding cascading climate tipping points, which indeed are “too risky to bet against”. https://www.nature.com/articles/d41586-019-03595-0 We may have already triggered a difficult to reverse millennial hothouse earth dynamic, but the speed at which this plays out can still be influenced by our decarbonization efforts. This is no longer about stopping climate change but about minimizing the economic and ethical losses and existential risks.

4) The damage function used by Nordhaus didn’t even consider the possibility of (regional) societal discontinuities and deep economic contractions as a result of geopolitical turmoil and armed conflict over critical resources, such as fresh water and habitable/arable land. The secondary effects of climate change, meaning the likely responses of human societies to rapidly changing climatic conditions, including the increased probability for nuclear conflict, are an even greater threat to the continuity of human civilization in the 21st century. Both, nuclear arms build-up and planetary heating are mutually reinforcing dynamics, as this excellent security analysis shows “How Rising Temperatures Increase the Likelihood of Nuclear War”: https://www.thenation.com/article/archive/nuclear-defense-climate-change/

In this context, it is notable that this year, the “doomsday clock” has been reset to 100 seconds to midnight, closer than it ever was during the cold war. https://thebulletin.org/doomsday-clock/current-time/