The Congressional Budget Office is half right… but also half wrong
- Dec 24, 2018 6:36 pm GMT
- 893 views
In being half wrong, the CBO imperils the US economy. Climate change costs may be relatively small today but like the Boiled Frog Syndrome if and when the costs grow it will be too late to do anything. The Trump Administration should accept the climate science and start addressing the issue realistically. There need be no additional costs.
Following the multi-agency US National Climate Assessment Report setting out the dramatic societal effects and costs that are coming with climate change, the Congressional Budget Office has dismissed the NCAR by saying that the costs will be negligible in the next decade and pose “little risk over the next 30 years”.
Naturally, there has been outrage from the climate science community. But let’s take a closer look. It turns out that the costs of continuing with BAU (Business As Usual) are enough to sink the US economy in the latter half of this century. By the time the rot has set in it will be too late to recover from the on-going pummelling that climate change will bring. While China, with its enormous growth, can grow its way out of climate change, the US economy cannot as shown in the GDP Growth Grid below in Figure 1.
Figure 1 GDP growth grid (for the historical range of US GDP growth): long term survival of the US economy depends on the US adopting actions in support of (or equivalent to) the Paris Climate Agreement, but not at any cost. The sea of red shows what would happen if too much is spent on decarbonisation.
America does not need to lead on climate change, merely be the co-operative global player it normally is. A world response to climate change, under the Paris agreement, requires all the major players to be rational actors. The reality is that climate change is happening, and it may be happening faster than we know, so CO2 emissions must be mitigated.
The counter-argument is that if we de-carbonise too aggressively (the sea of red in Figure 1) then the US economy will be harmed. So what is the optimum pathway? Some say it’s BAU. But that is not a rational approach; it will leave a legacy of devastation for today’s children as they grow up.
The Congressional Budget Office is half right… but also half wrong, tragically wrong. In the next blog we outline the practical mitigation pathway and what it might take to achieve it.
Bruce Menzies, Chairman, Predict Ability Ltd (PAL)
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