Economic impacts of climate change
By Drs. Robert & Sonia Vogl
President and Vice President,
Illinois Renewable Energy Association
For the scientific community climate change is real; a major factor in its existence is burning fossil fuels.
The national solution as embodied in the Clean Energy Plan advanced by the Obama administration is currently hung up in court awaiting resolution. With widespread resistance, Congress is unwilling to implement policies to curb emissions.
While the Paris Accord had participating nations agree on the goal of limiting their carbon emissions to keep the global temperature from rising above 1.5oC, it will take years before the world will know if the commitments are being implemented.
A paper entitled “Greenhouse Gas Emissions Targets for Limiting Global Warming to 2oC” created a global “carbon budget” detailing how much more carbon each country can release before crossing the global limit of a 2oC temperature rise. If carbon emissions remain equivalent to those of 2006 the “planet’s carbon budget would be exhausted by 2024.”
Assuming governments would initiate action to curb carbon emissions, a group of green investors set up the Carbon Tracker Initiative to determine how much carbon dioxide is in the world’s fossil fuel reserves. They concluded that 80 percent of the world’s fossil fuel reserves would have to be left in the ground to prevent uncontrollable climate change. Tar sands, oil shale and methane hydrides were not included with the reserves,
Bill McKibben, a climate activist, relied on carbon budget figures in developing a presentation used in a tour to alert the public to the numbers and their implications. His advocacy included stimulating college students to ask their schools to divest their endowments of fossil fuel investments.
The pressure to curtail carbon emissions has raised concerns of investors in firms whose earnings could be adversely affected. Warren Buffet addressed the issue in Berkshire Hathaway’s 2015 annual report under the heading of “Important Risks” that they have recognized and taken into consideration. One of the firm’s investments is in the BNSF railroad which moves large volumes of western coal. Buffet acknowledged the certainty of the loss of coal shipments for their railroad earnings as coal plants close. He mentioned another energy-related risk to earnings: the potential of energy storage developments adversely impacting the future of their renewable energy investments.
It seems to Buffet that is highly likely but not certain that climate change is a major problem for the planet. He indicated, “if there is only a 1 percent chance the planet is heading toward a truly major disaster and delay means passing a point of no return, inaction now is foolhardy.”
For Dr. James Hanson the time for action was 1988 when he declared to Congress that the greenhouse effect was already changing our climate. He continues his effort to convince our leaders of the need to address climate change. In his latest paper appearing in the journal Atmospheric Chemistry and Physics he claimed that we are headed for a much more rapid rise in sea levels than earlier projections.
While the science regarding climate change is gaining acceptance, political resistance remains and estimates of the costs rise as political turmoil rolls on, investments in renewable energy and efficiency continue to grow.