Don’t panic; focus on green energy R&D
The new United Nations report is being talked about as though it portends the end of the world: To avoid catastrophe, we must instantly transform the entire economy no matter the costs.
This is unjustified. The Intergovernmental Panel on Climate Change (IPCC), in its latest major global analysis, estimated that the total impact of unmitigated climate change from extreme weather, changes in agriculture, rising sea levels and so on would be equivalent to reducing the average person’s income by between 0.2 and 2 percent in the 2070s.
By then, developing world incomes will have increased by 400 percent to 500 percent or even more. Climate impacts have an ever smaller impact on humanity because of prosperity and resilience. A hundred years ago, climate disasters globally killed about half a million people annually. Today, with many more people, that toll has dropped by more than 95 percent.
Climate change is real and manmade, and it requires action. But the Paris agreement on climate change is already an incredibly expensive way of helping very little. Those using the latest IPCC report to call for bigger political promises miss the point by a mile.
Cutting carbon emissions is incredibly expensive. Green energy is not yet able to compete with fossil fuels to meet most of humanity’s needs. Forcing industries and communities to shift — or plying them with expensive subsidies — means everyone pays more for energy, hurting the poorest most.
If all the promises in the treaty are kept, the resulting global hit to growth will reach $1 trillion to $2 trillion a year by 2030. Those resources could have been used to make everyone more resilient and prosperous.
The solution to climate change isn’t to panic and double down on a flawed approach. What’s needed is a vast increase in spending on green energy research and development. Instead of trying to force people to replace cheap, efficient fossil fuels with inefficient technology, we need to ensure that green energy is the first choice for all.