The Real Cost of Climate change

No one argues that the cost of tackling climate change is going to come cheap, but a number of recent reports have put an exact price tag on it. And this global problem is about as expensive as they come. If you want to keep the planet cool, and stabilize the amount of carbon dioxide at 450 parts per million (ppm), which was the target set by the United Nations’ Intergovernmental Panel on Climate Change, that will cost $542 billion US per year, every year till 2030, according to the World Energy Outlook (WEO). The EU estimates that it about half that cost, or about $224 billion US per year. A research group called New Energy Finance sides with the WEO, putting the price tag at $515 billion US dollars a year.

The discrepancies between these two estimates depend on how quickly you think renewable energies are going to improve and the cost will decrease. (The cost of renewable energy will certainly fall: solar power has fallen greatly in price as the technology has improved.) But can it come down quickly enough? Suppose you’re an optimist and low ball the cost, like the bureaucrats at the EU, then the cost of reducing emissions to tackle climate change is mere $224 billion US per year, or $276 billion CAD. That’s $276 billion each year for the next 20 years. Which makes one wonder, where is all this money going to come from?