The debate concerning what to do about climate change often focuses on the projected cost of taking action. What about the expense in failing to act? An intriguing coalition of political and business leaders, from the left, center and right, made a thoughtful bid to provide an answer last week, looking to bring a greater sense of urgency to the discussion.
The coalition is led by Henry Paulson, a former treasury secretary and chief executive at Goldman Sachs, Thomas Steyer, a billionaire and former hedge fund operator, and Michael Bloomberg, another billionaire and former mayor of New York City. The ranks include two other former treasury secretaries, George Shultz and Robert Rubin. The message arrived via a report, “Risky Business,” a detailed and comprehensive modeling and calculation of the likely impact of climate change on the American economy.
The cost would be immense. While the economy would continue to grow, it also would take on substantial burdens. One projection puts the sea rise at roughly one foot by 2050, and possibly two or three by century’s end. That would translate into coastal property falling below sea level. At what price? The report puts the property loss between $60 billion and $100 billion by mid-century, and up to $500 billion by 2100, Florida and Louisiana hit especially hard.
Add, among other things, the expense of extreme storms, $42 billion a year along the East Coast and Gulf Coast, plus flooding, lost productivity due to scorching temperatures and agricultural yields declining by nearly three-quarters.
Not going to happen? Actually, this is where the report makes a key point. It presents the challenge as one about managing risk. In light of the scientific evidence, not to mention what many can see, is it reasonable to bet that little needs to be done? Or is it wiser to bear an expense up front, the report calling for a tax on greenhouse emissions, to prevent huge costs in the long run? As George Shultz told the New York Times, “I say we should take out an insurance policy.”