Thursday, June 18, 2009

The Economic Impact of Climate Change

Interesting post to the New York Times Green Inc. and Economix blogs today about a report released by the Obama administration detailing the economic impacts of climate change. The report, prepared by the National Oceanic and Atmospheric Administration (NOAA), lays out a veritable orgy of consequences if we can't get our environmental house in order and global warming is allowed to continue unabated. This sounds scary:

Flooding in particularly may cause mayhem in coastal areas like New York, the report says:
What is currently called a 100-year storm is projected to occur as often as every 10 years by late this century. Portions of lower Manhattan and coastal areas of Brooklyn, Queens, Staten Island, and Nassau County, would experience a marked increase in flooding frequency. Much of the critical transportation infrastructure, including tunnels, subways, and airports, lies well within the range of projected storm surge and would be flooded during such events.

Opponents of aggressive action to curb the dangerous changing of our climate like to claim that such action would have a catastrophic impact on our economy. Rarely, however, do we consider the economic impact of not doing anything. Here's what the report has to say about the potential cost for the insurance industry of more powerful storms and more unpredictable weather:

The insurance industry — especially government-sponsored insurance — will face major challenges. “In an average year, about 90 percent of insured catastrophe losses worldwide are weather-related,” the report says. “Escalating exposures to catastrophic weather events, coupled with private insurers’ withdrawal from various markets, are placing the federal government at increased financial risk as insurer of last resort.”

As illustrated by the debt-fueled consumerism that inflated our national economic bubble so large that it finally came crashing down all over itself and everything else, we live in a country that doesn't always like to take the long view. But despite any near-term economic sacrifices that might have to be made to legitimately battle climate change, it's clear that these pale in comparison to what may be faced under a business-as-usual scenario. Indeed, the most compelling argument for doing something, and doing something now, is still the promise of building an economy that doesn't depend on carbon emissions for its health and overall growth. It will take a whole lot of jobs to build the renewable energy systems needed to replace the amount of energy currently generated from dirtier technologies like coal and oil, far more than we will lose from letting these industries ride off into the sunset. There's a lot more promise in the potential growth of clean technologies than in the senseless propping up of an economic framework that seems bound to cost us more in the end.

For a country recently driven by "buy now, pay later" credit card debt, "invest now, or pay later," seems like the more relevant phrase when it comes to making the necessary changes to our economy.

Global Climate Changes, National Impacts (NY Times)
The Economic Impact of Climate Change (NY Times)

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