Our kids’ $535-trillion laundry bill, and climate change

Earth itself. And, mind you, it’s mostly our dirty work they would be paying for.

Well, a study published this week in the reputed Earth System Dynamics journal says that if we don’t do enough to cut carbon emissions, it will cost our children at least $535 trillion to clean up the atmosphere by year 2100. That’s about seven times the size of the global economy now.

Yes, but if we take responsibility and decide to trim emissions by at least 6 per cent a year by 2021, it may cost $8-19 trillion to clear unwanted carbon dioxide and avert the impact of climate change, according to the study led by James Hansen of the Columbia University Earth Institute, who is considered the father of climate research. So, this is a classic case of a stitch in time saving nine.

That’s another form of climate change denial. Trump thinks cutting greenhouse-gas emissions by moving to clean energy will cost the economy, especially jobs in the coal sector. And that’s why the US took a shocking (though expected) U-turn on the United Nation’s Paris Agreement and joined hands with the likes of Nicaragua and Syria. But this paper clearly shows that such costs and concerns are only temporary and inaction only begets bigger crises. This is true for the US as well.

For instance, let’s take Trump’s famous concern over “lost jobs, lower wages, shuttered factories, and vastly diminished economic production” due to climate change mitigation efforts. Trump says US commitments under the Paris accord would cost the country’s GDP $3 trillion, but he simply ignored the potential benefits from avoiding emissions, say experts, and avoided estimates on effects of climate change on GDP, not just for the US, but for the world as a whole.

A few months ago, a study by researchers at the University of California Berkeley found that unabated climate change could reduce global GDP by over 20 per cent by 2100 — this is the year by which our children would be forced to pay the whopping laundry bill we mentioned at the start. In 2015, a report from Cambridge University’s Judge Business School found that climate change (moderate warming scenario) could wipe out $400 trillion in ‘net present value’ in damages, while it would cost the world only $40 trillion to fight the calamity.

There’s more: A 2015 report from Citibank found that if we don’t do enough to cut emissions, climate change will cost $44 trillion by 2060, while investing in low-carbon energy would save $1.8 trillion through 2040, as compared to a business-as-usual scenario. An HBR analysis last week found that the share of national GDP at risk from climate change crosses $1.5 trillion in 301 major cities across the globe. Including the impact of human pandemics – which are likely to become more severe as the planet warms — the figure increases to nearly $2.2 trillion in economic output at risk through 2025.

Yes, it’s more a mindset issue and also one that of political will. Governments and businesses should join hands to make sure our future generations won’t share our laundry bill. Businesses must be more proactive and take fighting climate change more as a business need than a CSR activity because, as the first estimate from economic modelling revealed recently, climate change could shave off value of the world’s financial assets by $2.5 trillion as things stand now.

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