Net Zero Fails the Cost-Benefit Test – WSJ

A new special issue of the journal Climate Change Economics contains two ground-breaking economic analyses of policies to hold global temperatures to 1.5 degrees and its practical political interpretation, mandates to reach net zero, usually by 2050. Though more than 130 countries, including most of the globe s big emitters, have passed or are considering laws mandating net-zero carbon emissions, there s been no comprehensive cost-benefit evaluation of that policy until now.

One of the Climate Change Economics papers is authored by Richard Tol, one of the world s most-cited climate economists. He calculates the benefits of climate policy using a meta-analysis of 39 papers with 61 published estimates of total climate change damage in economic terms. Across all this, Mr. Tol finds that if the world meets its 1.5 degree promise, it would prevent a less than 0.5% loss in annual global domestic product by 2050 and a 3.1% loss by 2100.

If that sounds underwhelming, blame one-sided reporting on climate issues. While headlines tend to focus on stories of violent climate catastrophes and modeled worst case scenarios, the data reveal a far less frightening picture. Despite a drumbeat of stories this summer about rising heat deaths, higher temperatures also prevent cold deaths, and so far in much greater number. Globally, the result has been fewer overall temperature-related fatalities. Writ large, the damage the world experiences each year from climate-related disasters is shrinking, both as expressed in fraction of GDP and lives lost.

While media coverage tends to hype the benefits of climate policy, it plays down the costs, which Mr. Tol s analysis shows are substantial. Based on the latest cost estimates of emission reductions from the United Nations climate panel, he finds that fully delivering on the 1.5-degree Paris promise will cost 4.5% of global GDP each year by midcentury and 5.5% by 2100. This means that likely climate policy costs will be much higher than the likely benefits for every year throughout this century and into the next. Under any realistic assumptions, the Paris agreement fails a basic cost-benefit test.

via www.wsj.com