Global warming is worsening. It seems that new reports appear with increasing frequency emphasizing the worsening of global warming due to increased accumulation of manmade greenhouse gases (GHGs) in the atmosphere. They show that extreme weather or climate events already appear to be more severe and/or frequent than in the past, and will continue to worsen. They urge that efforts be made to counter the worsening of global warming. Most recently, the Intergovernmental Panel on Climate Change (IPCC) issued its Synthesis Report in November 2014 summarizing the more extended three-part Fifth Assessment Report dealing with the scientific basis for global warming; impacts, adaptation and vulnerability; and mitigation. Also, a few months ago the U. S. government issued its National Climate Assessment, focusing on global warming and its effects in the U. S.
Damages from recent extreme weather and climate events. Effects that can be related to global warming include storms and floods (Hurricane Sandy and coastal flooding in the U. S., 2012; regular fair weather flooding from high tides in the southeastern U. S., ongoing), heat waves and droughts (Russia, 2010; U. S. Midwest and plains, 2012 and 2013; Australia, 2013), forest wildfires, and heavy rainfall and river flooding (Pakistan, 2010; England and Wales, 2014). Such individual occurrences may be at least partly, or even entirely, caused by global warming, consistent with expected consequences of warming.
Why should we, the public, care about these events? These repetitive news items may seem, after a while, to be singing the same tune: “I’ve heard it all before, what’s new this time, why should I care?” After all, at least among those of us who live in developed countries, we live in cities or other settings where we don’t directly feel the damaging effects of extreme events. While such occurrences pass before our eyes on television and social media, our lives continue undisrupted from our normal routines. And if a weather- or climate-driven tragedy occurs abroad, we may well ask ourselves “why does that affect me?”
Here’s why: calamities driven by global warming already affect our pocketbooks, whether we were personally harmed by an event or not. Worsening warming in future years, with even more severe extreme events, will hit our finances even more. In the face of financial or economic consequences of global warming, we don’t even need to consider other correct and appropriate reasons for acting. Writers appeal to our reason, based on the scientific reports (correct as they are) documenting the scientific causes and effects of global warming that appear at each turn. Religious communities and other morals-based groups appeal to faith or our sense of morality (appropriate as those appeals are). These stress a moral responsibility we have to both people in impoverished lands who are affected by global warming but don’t have resources to respond, and our progeny who will be affected by worsening warming, yet who will be blameless. Others urge us to acknowledge the important health “co-benefits” arising from reducing emissions (beneficial as they would be). Some writers encourage us to change our attitudes and behaviors that might constrain the comfortable lifestyle that we, in developed countries around the world, enjoy and value (uncomfortable as this is likely to be). We can reject or accept these reasons for climate action as we see fit.
Financial consequences arising from extreme events. Storm surge damage caused by Hurricane Sandy across the extended New York Cityarea in October 2012 is estimated at $75 billion. It also caused 72 deaths, destroyed or damaged 650,000 homes and left 8 million customers without electricity. Of the damage, $13.2 billion was compensated by U. S. Federal disaster assistance payments. Private insurance benefits covered much of the rest. New York City is planning an extensive preventive adaptation project (adaptation refers to building new infrastructure or adopting other measures to minimize future impacts of warming) to keep ocean waters away from the city. Its cost for the city alone is estimated at US$19.5 billion. Other cities in the eastern U. S. are also devising adaptation master plans, incurring further major expenses.
The drought in the American Midwest and plains in 2012 caused major agricultural losses. By August 2012, 60% of farms in the region suffered drought conditions (moderate, severe, or extreme), affecting corn, soybean and wheat production, as well as cattle growth. As of November 2012 estimates of damage were US$75-150 billion, and the drought could, it was thought, adversely affect U. S. gross domestic product, the measure of overall national economic activity.
Fair weather ocean flooding is occurring in the American state of Florida at high tides, and in tidewater Norfolk, Virginia. In Florida, the most severe prediction foresees sea level rise of up to 2 feet (0.6 m) by 2060, and up to 6 feet (1.8 m) or more by 2100. The Miami area alone plans to spend US$400 million to keep the ocean at bay. A study by Florida Atlantic University foresees a need for upgrading drainage and pump stations costing US$500 million-1 billion just for one small city, Pompano Beach. To combat a rise of 1.5-2 feet (0.5-0.6 m) by 2062, the study foresees a need for “hundreds of billions of dollars”. Considered worldwide, the potential costs for such adaptation measures are very large indeed.
These costs are borne by all of us. Governmental responses to each disaster comes to many billions of dollars. These expenses are incurred on an emergency basis after the disaster occurs, and are provided from governments’ treasuries; in other words, ultimately from the taxes that we, their citizens, pay. When unforeseen disasters call for emergency responses governments must raise taxes to provide the needed funds.
Covered insurance benefits are drawn from the investment assets of the insurers, which generally are private corporations. To the extent that excess benefit payments lead to lower profits or even losses, insurance companies would likely raise the premiums on the property insurance policies they issue. The premiums that we the public pay would rise, whether we suffered actual losses or not.
Droughts in farming regions of the world reduce crop yields, causing higher commodity prices for the affected crops. (In the case of the U. S. 2012 drought, a reduction in exports lessened the domestic effects of the drought, keeping price increases relatively small.) OXFAM GB published its briefing report “Extreme Weather, Extreme Prices” on Sept. 5, 2012. Oxfam finds that by 2030 prices of staple crops will double from present values, with about half of the increase being due to global warming. The need to pay more for food staples will be a severe hardship especially for people in impoverished nations of the world.
These examples show how individual events arising from global warming lead to unforeseen expenses in the affected areas. As global warming worsens, such costs will become more general, affecting tax burdens we all will bear, our insurance premiums, and effects on economic activity, impacting all of us.
In the energy economy of coming years we will be choosing between investing in mitigation of emissions and battling their effects by adaptation, or graded proportions between these limits. (Mitigation refers to projects that reduce rates of emission of GHGs into the atmosphere.) At the present time, with damages from global warming already upon us, it is unavoidable that we will need to spend economic resources on remedies (adaptation) such as repair of storm and flood damage and prevention of future damage, aiding poor nations with food and other basics. The demand for adaptation measures such as these will only expand as global warming worsens because more GHGs are accumulating in the atmosphere. The need to spend money on these remedies will leave fewer resources available for mitigation measures, without new spending.
Maximizing investments in mitigation measures “now” (i.e., earlier) will reduce the need for adaptation to worsening warming in the future. The IPCC has issued five Assessment Reports since 1990, every 5-6 years. The reports, each in turn, have warned, from the outset, that we need to reduce annual rates of emission of GHGs in order to stabilize the accumulated content of GHGs in the atmosphere at the lowest levels possible. This is necessary because it is the accumulated GHG level that governs the extent of warming of global temperatures. If meaningful abatement steps were not undertaken, the ARs have warned, serious consequences to human welfare, harms that we now know require emergency spending to adapt to them, will occur. Had we, the global group of nations, undertaken preventive steps to abate GHG emissions when the early Assessments were issued it is highly likely that the needs for adaptation would be less pressing than we are experiencing now.
Going forward, since the world has failed to implement meaningful abatement of emissions, the more severe warming of the earth that is foreseen will require ever greater spending for adaptation just to stay even with progressive growth in climatic harms and damages, as well as more intensive mitigation measures.
Why care about global warming? Suppose a homeowner in America or a villager in Asia notices the first drips indicating a leaky roof. She/he needs to repair and maintain her/his roof right away in order to minimize damage to the home’s contents. The proverb, “a stitch in time saves nine” applies perfectly here. Preventive investment in the integrity of the roof, undertaken before serious leaks develop, ensures that the home remains dry and undamaged. If the roof is not repaired, damage to the home will continue indefinitely, requiring continued spending just to fix the ongoing damage.
In a similar fashion we, the people of the world, should be investing in steps to minimize the progress of global warming now in order to limit the need for emergency remedies later. As the effects of warming become more severe the projects needed to adapt to new, harsher realities become more extensive and more costly. Just as with the home and its roof, if we fail to abate GHG emissions “now” the damages from extreme weather and climate will continue, requiring that we provide emergency relief and build stopgap projects more or less indefinitely.
Global warming will affect our wallets, now and in the future. Regardless of whether we agree that global warming is an issue of reason (based on sound science), a moral issue (the justice of accounting for its effects on the poor and on our children and grandchildren), a health issue, or a lifestyle issue, it clearly is a financial and economic issue.
We, the people of the entire world, would derive clear financial benefit by undertaking meaningful abatement measures to reduce GHG emissions at the present time, rather than delay. By waiting it is certain that we will need to spend increasing resources in the future to adapt to the damages that warming brings, as well as investing more intensively in mitigation projects.
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