Delaying Action on Climate Change Will Increase Costs, Risks

Jason Furman is the chairman of the White House Council of Economic Advisors, which prepared The Cost of Delaying Action to Stem Climate Change.

Jason Furman is the chairman of the White House Council of Economic Advisors, which prepared The Cost of Delaying Action to Stem Climate Change.

29 July 2014

Washington — The longer the country waits to take action to counter the effects of climate change, the higher the cost of doing so, according to a report released by the White House on July 29.

“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,” according to the report prepared by the White House Council of Economic Advisors.

The report is based on evidence that climate change already is affecting the United States with increased storm severity, harsh drought conditions and rising sea levels encroaching upon coastal areas. The Obama administration announced a wide-ranging Climate Action Plan in June 2013 to mitigate climate change and prepare for its consequences, but elements of the plan face opposition from critics who argue that a transition to cleaner fuels would have steep costs.

Reducing carbon dioxide emissions from electric-power plants is a major proposal of the plan. Critics say that could bring higher power bills for consumers and compromise power availability.

The report, The Cost of Delaying Action to Stem Climate Change, states that if action is delayed until warming reaches 3 degrees above historic norms, rather than a 2-degree rise, costs to the economy could reach $150 billion annually.

The report suggests that actions taken to reduce greenhouse gas emissions, prepare for climate change and mitigate its damage should be viewed as an insurance policy against the consequences of “climate catastrophes.” Actions today can prevent some of the dire events predicted in the event of higher temperatures and rising sea levels.

“Climate policy that serves as climate insurance is an investment that also leads to cleaner air, energy security, and benefits that are difficult to monetize like biological diversity,” the report says.

Even though some benefits of near-term action would be spread out over time, immediate positive results from reducing greenhouse gas emissions are also predicted. Lower levels of emissions in the air would show immediate benefits in the reduced occurrence of respiratory diseases, lower medical costs and fewer deaths associated with pollution-related illnesses, the experts predict.

“Acting today will save us money, save us time, and advance a wide range of objectives,” said Jason Furman, chairman of the Council of Economic Advisers, in a briefing with reporters.

Another objective is that the United States show leadership to address climate change on the world stage, White House officials say. The fact that the administration has set a course to reduce power plant emissions — among the greatest source of greenhouse gases — demonstrates to other nations that the United States is taking the threat seriously and is willing to make the difficult policy choices, the officials say.

The proposal put forth by the Environmental Protection Agency — the Clean Power Plan — would reduce carbon dioxide pollution from the electricity-generation sector 30 percent by 2030, equivalent to the carbon dioxide from two-thirds of all cars and trucks in America. That level of emission reduction and other actions put the United States on a track to have reduced carbon pollution 17 percent below 2005 levels by 2020.

The EPA is holding hearings during the week of July 27 to allow public input on the Clean Power Plan. Administrator Gina McCarthy said in a July 28 statement that the agency is working to maintain “an open and inclusive process” in the development of the carbon-reduction regulations to achieve a policy that is widely supported. Since the announcement of the proposal in early June, the agency has received more than 300,000 comments.

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