Around the world, public finances are dangerously stretched. Per capita growth rates continue to fall while pension, education, health care and defense costs climb. [emphasis, links added]
These urgent priorities could easily require an additional 3 to 6 percent of GDP. However, green activists have loudly called on governments to invest 25% of their gross domestic product in this effort to curb economic growth in the name of combating climate change.
If climate apocalypse is coming, they have a point. The truth is much more prosaic.
Two major scientific estimates of the total global cost of climate change have recently been released. These are not individual studies and may vary (the most expensive studies get significant media coverage).
Rather, they are meta-studies based on the entire peer-reviewed literature. One is written by Richard Tol, one of the most cited climate economists; the other is by William Nordhaus, the only climate economist to win a Nobel Prize.
Research shows that a 3°C rise in temperature (which is somewhat pessimistic based on current trends) will result in global losses equivalent to 1.9% to 3.1% of global GDP by the end of the century.
To put this into context, The United Nations estimates that by the end of this century, the average person will be 450% as wealthy as today. But due to climate change, he or she will feel “only” 435%-440% of what it feels like today.
Why is this so different from the impression we get in the media? Alarmist activists and gullible journalists fail to take into account the simple fact that people are remarkably adaptable and can solve most climate problems at relatively low cost.
Climate change is a problem, not a disaster
Without climate change,
51% more calories than in 2010
But is climate making food production more difficult? Yes
Global warming is “only” 49% more calories than in 2010 https://t.co/XvS1S9MH6z https://t.co/HGxT7Msfek pic.twitter.com/65x5LYsN0C
— Bjorn Lomborg (@BjornLomborg) July 31, 2024
Eat: Climate activists warn we'll starve, but study shows Without climate change, food availability would not increase by 51% by 2100, but “only” by 49%.
Or weather disasters: which killed 500,000 people a year in the 1920s, compared with fewer than 9,000 a year in the past decade.
The 97.5% drop in mortality is because people are more adaptable as they become wealthier and have access to better technology.
Deaths from climate-related disasters have fallen by 97.5% this century
Wealthier, smarter, more resilient societies Disaster reduction fatalities
This drowns out any potential climate signal
Why wasn't this reported?
Instead, the media only brings climate doom https://t.co/jtzR9CWCV4 pic.twitter.com/c28cso7UFJ
— Bjorn Lomborg (@BjornLomborg) January 1, 2025
Extreme climate activists and far-left politicians show their true colors as they push for “degrowth” to reduce emissions.
Leaving people worse off and reversing gains in ending extreme poverty would be a tragic mistake, making it harder to solve all our other problems. Furthermore, it is ludicrous to think that a strategic rival of the West such as Vladimir Putin would adopt a similar approach.
More responsible politicians “only” want net-zero carbon emissions by 2050. Replace fossil fuels with less efficient green energy.
The total cost would be huge—$15 to $37 trillion per year for the rest of the century, Equivalent to 15-37% of today's global GDP.
Given that wealthier Organization for Economic Co-operation and Development (OECD) countries will bear most of the costs, The price tag would be equivalent to more than $10,000 per person per year in rich countries.
The cost could run into the trillions of euros, but the entire effort would only reduce temperatures by 0.004°C by the end of the century.
Not only is this politically impossible; But gains this century amount to just one percent of GDP.
The real cost of ineffective climate policy is that it diverts resources and attention from other priorities. Europe offers a concrete lesson.
Twenty-five years ago, the European Union announced that through massive investments in research and development across the economy, It will become “the most competitive and dynamic knowledge economy in the world.”
It failed miserably: Innovation spending has barely changed, with the EU now lagging far behind the US, South Korea and even China.
Instead, the EU has changed its focus, choosing “sustainable” economics over sound economics in its short-sighted climate obsession. The EU's decision to raise its 2030 emissions reduction target is pure virtue signaling.
The cost could run into the trillions of euros, but the entire effort would only reduce temperatures by 0.004°C by the end of the century.
A lack of focus on innovation is holding Europe back. Over the past decade, annual per capita growth in the euro area was just over one percent.
The EU spent 2 trillion euros on symbolic climate policies that would have achieved the innovation spending targets of the past two decades.
Reading break at the State Post Office
