The White House is calling for new environmental regulations to serve as “climate insurance” after a new report warned that not taking action on global warming could cost the economy at least $150 billion.
The report, “The Cost of Delaying Action to Stem Climate Change,” from the White House Council of Economic Advisers — which is not usually involved in climate issues — said that delaying policy actions by a decade would “risk substantial economic damage.”
“With our country already experiencing the effects of climate change, the president has taken action to cut carbon pollution by moving to cleaner sources of energy and improving the energy efficiency of our cars, trucks and buildings,” the White House said in a statement. “But further steps are urgently needed to ensure that we leave our children a planet that’s not polluted or damaged.”
Essentially, the report is seeking to bring back enhanced carbon regulation, which Congress rejected in 2009.
“[I]f a policy delay leads to higher ultimate CO2 concentrations, that delay produces persistent economic damages that arise from higher temperatures and higher CO2 concentrations,” the report said. “Alternatively, if a delayed policy still aims to hit a given climate target, such as limiting CO2 concentration to given level, then that delay means that the policy, when implemented, must be more stringent and thus more costly in subsequent years. In either case, delay is costly.”
“These costs will take the form of either greater damages from climate change or higher costs associated with implementing more rapid reductions in greenhouse gas emissions. In practice, delay could result in both types of costs,” it said.
According to the council, a 2-degree temperature increase could affect 0.9 percent of the estimated 2014 gross domestic product — approximately $150 billion. As temperatures rise, the cost would be greater, the report said.
“Climate policy can be thought of as ‘climate insurance’ taken out against the most severe and irreversible potential consequences of climate change,” the report said. “Events such as the rapid melting of ice sheets and the consequent increase of global sea levels, or temperature increases on the higher end of the range of scientific uncertainty, could pose such severe economic consequences as reasonably to be thought of as climate catastrophes.”
“The longer that action is postponed, the greater will be the concentration of CO2 in the atmosphere and the greater is the risk,” the report said. “Just as businesses and individuals guard against severe financial risks by purchasing various forms of insurance, policymakers can take actions now that reduce the chances of triggering the most severe climate events.”
In June, the Environmental Protection Agency announced a plan to cut carbon emissions from coal-fired power plants, which is facing strong opposition from Republicans and also some Democrats, such as West Virginia Sen. Joe Manchin, who was elected promising to fight cap and trade.