According to the Intergovernmental Panel on Climate Change (IPCC), the planet is due for a major climate disaster by 2040 unless governments take drastic action to reverse course. And the financial cost of taking action will likely be far less than the cost of the catastrophe in the context of global GDP figures.
The 1,000+ page report, which cited more than 6,000 scientific studies and had input from scientists in dozens of countries, concluded that the global temperature will increase by approximately 2.7 degrees Fahreinheit (1.5 degrees Celsius) if current trends continue unabated. The paper calls on all of society to take immediate, drastic steps to cut greenhouse gas emissions to 45 percent of what they were in 2010 in the next 12 years, and by 100 percent by 2050, in order to prevent this level of warming from happening.
One stunning figure from the report is that the planet warming by 2.7 degrees Fahrenheit by 2040 would displace approximately 50 million people living on coastlines due to rising sea levels, and that increased frequency of severe weather events would collectively cost approximately $54 trillion. If the planet warmed by 3.6 degrees Fahrenheit, the cost could balloon to as much as $69 trillion.
To put those numbers in context, global GDP in 2017 was $80 trillion in 2017, according to data from the World Bank. This means that climate change would wreak enough havoc to equal more than two-thirds of current global GDP by 2040, if the planet’s temperature increases by 2.7 degrees. And if the planet warms by 3.6 degrees, the damage would amount to more than 86 percent of global GDP.
This far outpaces the costs of mitigating climate change, according to data compiled by global management consulting firm McKinsey & Company. If governments around the world pursue all low-cost abatement strategies currently available, it would cost between €200 billion and €350 billion ($231 billion to $405 billion) each year through 2030. This amounts to between 0.4 percent and 0.75 percent of the $54 trillion cost of climate change in the IPCC report.
However, McKinsey & Company estimated that in order to develop the technologies needed to combat climate change over just a decade, governments around the world would need to front an initial capital investment of €530 billion ($613.5 billion) each year by 2020, and €810 billion ($937.6 billion) by 2030. However, those numbers are still just between 1.13 percent and 1.73 percent of the estimated $54 trillion cost of doing nothing and having the planet warm by 2.7 degrees.
The IPCC report suggested that not only do governments need to take collective action, but that all of humanity should consider serious lifestyle changes in order to keep global temperatures from warming by 2.7 degrees. However, perhaps the greatest sacrifice will have to come from the 100 companies responsible for more than 71 percent of all global carbon emissions since 1988 — and the 25 companies responsible for more than half of those emissions.
Carl Gibson is a politics contributor for Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.