When it comes to climate change, there’s broad consensus among economists that the potential economic impacts will be serious, widespread and more severe than previous estimates have indicated. At least, this is the conclusion of a new survey, published Monday by the New York University School of Law’s Institute for Policy Integrity — and experts say we should be listening to their warnings.
The report, which was authored by the Institute’s Derek Sylvan and Peter Howard, compiled answers from more than 300 experts on the economics of climate change in response to a set of 15 questions regarding climate change risks, policies and potential damages.
“We figured if you want to understand how climate change will affect our daily lives, it makes sense to ask the economists who study issues like food production, climate adaptation, energy economics,” said Sylvan, strategy director at the Institute for Policy Integrity. “And so essentially our survey helps clarify the wisdom of the crowd among this group of experts.”
Sylvan and Howard compiled their pool of experts by creating a list of all the people who had published a climate change-related article in a leading economics or environmental economics journal since 1994. The survey questioned the economists on how serious a problem they felt climate change will be in the future, what economic sectors are likely to be negatively affected, how soon they expect the effects to begin manifesting and how seriously these impacts will affect global output.
It also included questions about climate policies, such as whether U.S. reductions of greenhouse gas emissions should depend on the commitments of other countries, as well as their opinions on current estimates of the social cost of carbon — that is, the cost of emitting one ton of carbon into the atmosphere in terms of the future economic damages it would inflict on the Earth.
Overall, there was general agreement among the responders on many of the questions. A majority felt that climate change will begin to have a net negative impact on the economy in the near future (the median estimate being by the year 2025) and that many sectors of the U.S. economy will be harmed, particularly agriculture, fishing, utilities, forestry and outdoor recreation.
Additionally, the respondents seemed to agree broadly that strong action on climate change is necessary to mitigate these effects. More than three-quarters of them said they believed the U.S. should commit to reducing greenhouse gas emissions regardless of the actions taken by other countries, and more than 80 percent of them said they believed the U.S. could induce other nations to reduce their greenhouse gases as well by adopting such policies.
This, in particular, was a “very strong result,” according to Scott Barrett, Lenfest-Earth Institute Professor of Natural Resource Economics at Columbia University. Opponents of strong U.S. climate policies have often argued, “‘What’s the point of the U.S. doing anything when… other countries aren’t acting?’” Barrett said. “What you’re getting here is a message from this group of people that that actually isn’t the case.”
The fact that there was such consensus at all throughout the survey is one of the most significant things about the report, said Gernot Wagner, lead senior economist at the Environmental Defense Fund.
“Typically, when you hear about consensus of economists you have a right to remain skeptical,” Wagner said. But, he said, the survey shows that when it comes to climate change, “amongst economists — much like among scientists — there is a lot of consensus in what are the implications and what are the policy conclusions.”
Notably, when the report’s authors compared the results of this survey to other surveys conducted among members of the general public, they found that economists seemed more concerned about the impacts of climate change than the public at large. And while this may not be surprising, it’s significant, according to Wagner.
“If those who know the most about the topic are the most concerned, that’s really what should be worrying us about climate change,” he said.
One of the most important topics included in the survey was the social cost of carbon. The value most commonly used in the U.S. for this cost is $37 per ton, which was calculated by a U.S. government working group. This value has been frequently used in studies and reports aimed at quantifying the potential damages of future greenhouse gas emissions or optimizing economic policies intended to reduce these emissions, such as carbon-pricing schemes.
However, many experts have spoken up in the past about the possibility that this cost is significantly underestimated — and now, the new survey suggests that economists generally agree on this point. The survey found that more than half the respondents believe that the social cost of carbon is higher than $37. Eighteen percent of the respondents thought it was a likely estimate, while just 8 percent said they believe $37 is too high.
This sentiment implies that calculations using this $37 value have underestimated the future economic impacts of climate change. In fact, the report notes that the respondents estimated higher economic impacts than similar past surveys have indicated.
On average, respondents in this survey predicted between 5 and 10 percent losses of global GDP, assuming global temperatures rise by 3 degrees relative to their pre-industrial levels by the end of the century. They also felt, on average, that there was between a 10 and 20 percent risk of catastrophic climate impacts, given the same scenario.
The release of the survey “couldn’t be timelier,” according to Wagner, given that it’s coming out right at the start of the second week of negotiations at the UN’s climate conference in Paris. And it’s a notable point that the goals currently being worked out at the conference are so much in line with the sentiments reflected in this survey, said Barrett.
“The world is coming together in Paris, and there’s really no dispute here, there’s no discussion here, about whether [climate change] is a real problem,” he said. “And so countries are agreeing about that, and I think what they’re agreeing to is consistent with what the economists are agreeing to.”
The real challenge, though, will be whether they can agree to an international treaty on the reduction of greenhouse gas emissions. Throughout the next week, delegates from dozens of nations around the world will continue to work on this agreement. And the high level of agreement among the respondents in this particular survey can be taken as a spur to action by those negotiators, Sylvan said.
“It’s clear from this project that the vast majority of respondents believe that aggressive climate policies are desirable from an economics standpoint,” Sylvan said. “And I think that that should probably create an even greater sense of urgency for policymakers in the U.S. and for international negotiators in Paris.”