Washington, USA (GLOBE-Net) - Most people agree that global warming is going cost us dearly. And under the old maxim that an once of prevention is worth a pound of cure - most people also agree that doing nothing about climate change will cost us more in the long run. Putting an exact price tag on inaction is a complicated process, but one that must be undertaken in order to prioritize mitigation or adaptive measures to cope with a vastly changing world.

A research report just released by economists at Tufts University provides some insight on the true costs of inaction - at least for the United States, and confirms that it would be far less expensive to take aggressive action to cut greenhouse gas emissions now than paying the price that climate change will exact if nothing is done.

The Tufts study includes a "bottom-up" analysis of the climate change related economic impacts for the United States in four categories: hurricane damage,  real estate losses,  increased energy costs and increased water costs.

It says that by 2100, annual costs would be $422 billion for hurricane damages; $360 billion for real estate losses (particularly for the Atlantic and Gulf coasts, and Florida); $141 billion in increased energy costs; and $950 billion in water costs, particularly in the Western United States.

That adds up to an annual loss by 2100 of 1.8 percent of the US Gross Domestic Product (GDP).

The study’s "business as usual" scenario, in which greenhouse gas emissions continued at an increasing rate, was taken from the high end of likely outcomes of inaction described by the Nobel Prize-winning Intergovernmental Panel on Climate Change last year. The Tufts study also incorporated some later scientific findings.

The study projects that the average temperature will increase by 13 degrees Fahrenheit in most of the United States and 18 degrees in Alaska in the next 100 years, intensifying heat waves, hurricanes and droughts.

The report also forecasts stronger hurricanes as a result of higher sea surface temperatures; sea level rises of 23 inches by 2050 and 45 inches by 2100 that would inundate low-lying coastal areas; and higher air-conditioning bills in the Southeast and Southwest that wouldn’t be offset nationally by lower heating bills in the North.

The authors of the Tufts study also used a revised version of the model used by Nicholas Stern for his 2006 assessment of the cost of inaction on a global scale. Using that model, the Tufts economists found a U.S. loss of 3.6 percent of GDP by 2100. (See GLOBE-Net article A New Stern Report on Climate Change)

The Tufts study notes that continuing on the business-as-usual path will make global warming not just an environmental crisis, but an economic one as well and recommends the following federal actions to curb emissions and avoid the worst economic impacts expected from global warming:

Enact comprehensive mandatory limits on global warming pollution to stimulate investment in all sectors and guarantee that we meet emission targets. A mandatory cap will guarantee that the US meets emission targets in covered sectors and will drive investment toward the least costly reduction strategies.

If properly designed to support efficiency and innovation, such a program can actually reduce energy bills for many consumers and businesses. A successful program will include:

• a long-term declining cap,
• comprehensive coverage of emitting sources,
• pollution allowances used in the public interest,
• allowance trading, and
• limited use of offsets.

Overcome barriers to investment in energy efficiency to lower abatement cost starting now. While a mandatory cap on emissions is essential (and the associated allowance value can substantially fund efficiency), many of the opportunities require additional federal, state, and/or local policy to overcome barriers to investments. Specifically, there are substantial gains to be realized in building, industry, and appliance efficiency and in smart transportation such as advanced vehicles and smart growth.

Accelerate the development and deployment of emerging clean energy technologies to lower long-term abatement costs. To accelerate the "learning by doing" needed to develop an affordable low-carbon energy supply, the US must support rapid development and deployment of renewable electricity, low-carbon fuels, and carbon capture and disposal that sequesters carbon dioxide in geological formations deep beneath the earth’s surface.

What to do?

In early June the US Senate will consider legislation, the Lieberman-Warner Climate Bill, that will set declining limits on GHG emissions and will establish a market for pollution permits. The system is designed to reduce total U.S. emissions by 66% from 1990 levels by 2050.

There have been more than six studies of the cost of reducing U.S. greenhouse gas emissions as outlined in the Bill. All use different assumptions and have different outcomes.

Unlike the Tuft’s review, none of these studies looked at the costs of not acting, said Eileen Claussen, president of the Pew Center on Global Climate Change, which recently examined some of these studies.

"Most of the debate we expect will be about how much it will cost to implement the bill. This report provides the other side of the ledger - how much it will cost if we don’t act," said Dan Lashof, director of the climate center at the Natural Resources Defense Council, an environmental group that commissioned the study.

The Pew Center economists found that many of the studies of the costs of reducing emissions disregard cost-saving technologies and programs. They also said that all models of the costs predict that if the measures outlined in the bill were put into effect, the economy would continue to grow. The costs would be felt as a reduction of future growth.

Frank Ackerman, an economist at Tufts who was one of the main authors of the study, said the impact of climate change would be worse than what his numbers showed "because of the human lives and ecosystems that will be lost and species that will be driven into extinction - all these things transcend monetary values."

Scientists already can observe signs that the Earth is warming, including diminishing summer ice in the Arctic Ocean, drier conditions in the West and more severe droughts and storms, Lashof said. Most of the dangerous changes that are predicted can be avoided, he added, "but our window of opportunity is closing very rapidly."

A similar study observing the impacts of climate change on Canada was released by Natural Resources Canada in March, 2008.  The report, From Impacts to Adaptation: Canada in a Changing Climate, also found that ignoring climate change could have significant ramifications on Canada’s economy, infrastructure and wellbeing. 

The Full Tuft report can be found here.

The NRCan report, From Impacts to Adaptation: Canada in a Changing Climate can be found here.

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For More Information: Tufts University