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Cost of Inaction
June Reyes and Erika Kociolek
Inaction
“All too infrequently, inaction is motivated by the perceived high cost of reducing greenhouse gas emissions” CIER, University of Maryland
Likely Impacts of Climate Change
Frank Ackerman and Elizabeth Stanton, Global Development and Environment Institute, Tufts University
Likely Impacts of Climate Change
Frank Ackerman and Elizabeth Stanton, Global Development and Environment Institute, Tufts University
Climate Risks
Issue Areas
Areas ImpactedWater
Coastal Impacts
Energy
Human HealthForest Fires
Insurance Claims
Agriculture
Ecosystems & extinctions
Costs - EnergyUnder extreme
heat events, the increase in net energy expenses in California is expected to rise by $2 to $18.7 billion by 2100
Costs - Insurance ClaimsOverall risk exposure of insurers’
has grown considerablyFor example: National Flood
Insurance Program’s exposure increased four since 1980 to $ 1 trillion in 2005 and FCIC exposure grew to $44 billion
Costs - Ecosystems and extinctions Pharmacological value “Forests are an integral
part of biodiversity and store a large fraction of the planet’s released carbon, a service for which there is now a market price on the European carbon markets - tens of billions of dollars” Geoffrey Heal
Costs - Agriculture Loss to Central
Valley $278.5 to $829 million, depending on the dryness of year
Decreased supplies of water are expected to diminish the value of farmland by around 36%
Costs - Water Meeting increased
urban demand for water in California is estimated to cost the state $316 million to $5 billion per year by 2085
Groundwater withdrawals increased 52% in California in recent years
Costs - Coastal ImpactsTo protect SF Bay
Area and stretch of coast south of Santa Barbara from a 3 feet rise in sea level, initial investment $1.52 billion and $152 million in annual maintenance costs
Costs - Forests and Forest FiresTimber yields
are expected to decrease by 18% for mixed conifers and 30% for pine plantations in California
More frequent and severe forest fires are expected
Costs - Human Health Tropical diseases will
spread northward, and heat waves and other extreme events will become more common
Increased incidence of asthma, heat-related diseases, and other respiratory ailments may result from climate change
Costs - Miscellaneous Recreation
industry: skiing, is $1 billion for the entire region
Wine production: $3.2 billion, may be compromised as grape quality will diminish with higher temperatures
Total Cost of Inaction? IPCC III estimated marginal damage of
CO2 emissions $5 - $125 per tonne of CO2 emitted
Multiply by 5,956.98 million metric tonnes of carbon emitted by the US in 2005, 28,192.74 world-wide
Total estimated cost: $29,784,900,000 - $744,622,500,000
International Energy Annual 2005
Stern Report“Our actions over the coming few
decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and economic depression of the first half alf of the 20th century” Sir Nicholas Stern
IPCC Mitigation StrategiesEnergy conservation and efficiency
improvementsRenewable energy (solar,
hydroelectric, wind, traditional and modern biomass, and ocean thermal energy conversion)
Nuclear energyCO2 capture and disposal
Discussion Questions Given the high cost of inaction,
is there motivation for governments to implement aggressive mitigation strategies and implement practical solutions ?
What is realistic prediction of future returns on capital? (how do you predict welfare of future generations) How does this represent all countries?
Climate change damages will not be distributed evenly- how do we take this cost into account when calculating “damages vs. mitigation” costs?
In addition to inequity between developing vs. developed countries how do we address future generation inequity?
Can one really do a cost-benefit analysis of climate change?
What is UCSD doing?
• Do the questions about global warming policy- how much, how fast and what cost still remain open?• Will earlier mitigation increase flexibility?• How do you take into account the real cost on the environment in the GDP?• If reductions are not done on a global scale are we really able to calculate the true cost?• How should equity be applied to developing countries?• How do we convince all countries that international cooperation could significantly reduce cost of emission reduction?