Climate Change is Too Expensive
To appreciate how costly global warming and associated climate change will be, consider the economic repercussions of some
recent isolated climatic events. While we do not know that global warming caused these disasters, their costs illustrate the
significant impact that changes in climate can have on society.
The 1995 hurricane season in the Atlantic was one of the most active on record. One storm, Hurricane Felix, caused
losses to U.S. coastal tourism without even coming ashore; Hurricanes Luis and Marilyn left at least 20 people dead and
destroyed property throughout Caribbean islands; and Hurricane Opal cut a swath of destruction through the Southeast,
killing 19 people and causing billions of dollars in damage.
The 1993 floods in the Midwest U.S. caused an estimated $15.6 billion in damages and 38 deaths (CEQ, 1995, p. 59).
Hurricane Andrew in 1992 left 250,000 people homeless, destroyed 85,000 homes, and caused estimated losses of
more than $30 billion (U.S. OTA, 1993, p. 163).
Years of drought in California contributed to a series of devastating fires, including the 1991 fire in Oakland that
destroyed 3,000 homes, killed 25 people, and cost over $1.5 billion in damages (Smithsonian Institution, 1994, p. 110).
Curbing Global Warming Pollution: The Best Insurance for the Money
While we cannot say exactly what the effects on a specific town will be, the potential for the impacts to be catastrophic and
irreversible is all too real. Given this risk, it is important to reduce global warming pollution now — to buy "insurance" against
the potentially insurmountable costs — by reducing our consumption of fossil fuels and stopping deforestation. If we do
nothing, society will face serious economic and ecological consequences.
This "insurance policy" is more than affordable. There is overwhelming evidence that by improving energy efficiency and
switching to renewable energy sources, the U.S. can save billions of dollars, create jobs, and improve the environment.
The True Costs of Global Warming
Even the best estimates of the costs of global warming understate the true costs that climate change will impose on society
since they ignore many important effects. The costs of global warming to society will go well beyond lost dollars. Not only will
changes in climate bring economic hardship to many areas, but they will have serious social, cultural, political, and
environmental implications, many of which cannot be put in dollar terms. For example, climate change will affect human health,
species and ecosystems, the values of which are not determined in the conventional market system. In addition, the impacts of
climate change will vary across regions and generations, and will therefore likely contribute to both political and social conflict.
A Numbers Game
Attempting to put a dollar value today on the how much global warming will cost tomorrow minimizes its true consequences.
Global climate change will affect our lives in many ways. These will not be abstract or distant consequences, but ones that
damage our health, our livelihoods, and our surroundings. Some of the consequences of global warming can be paid for —
new roads to replace those that wash away, higher health care costs as tropical diseases spread, and increased costs of
irrigating drought-stricken farmlands. Other consequences are beyond quantification — deaths, the trauma of more violent
storms, the extinctions of plant and animal species.
A number of analysts have measured the potential dollar costs of global warming's impacts in an effort to compare the
"benefits" of policies to curb global warming with the "costs" of doing so. Recent studies using this cost-benefit approach yield
a wide range of estimated economic costs of climate change. For the U.S. alone, annual estimates range from a low of $59.2
billion per year by Nordhaus (1994), a vocal critic of actions to curb global warming, to $438.75 billion per year by Titus
(1992). Some proponents of quantitative cost-benefit analysis argue that it provides policymakers with a consistent, unbiased,
and understandable framework on which to base their decisions.
It does not. Cost- benefit analysis has many flaws as a policy tool. Any effort to measure the impacts of global warming in
dollar terms will significantly underestimate its true costs.
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