Our world is warming at an accelerating rate. The year that just ended set another series of records in that direction. As the celebrations ushering in the New Year were winding down, the news that 2016 was the warmest year on record began to pour in—just as it has done for the past two consecutive years. On January 3, Ecowatch pointed out, “Climate scientists are all but assured that 2016 was the hottest year ever recorded.” They went on to add, “If that sounds familiar, 2014 and 2015 were also the hottest years since record-keeping began in 1880.”
In reality, we did not have to wait until the year closed to know we were crossing a new threshold. By the end of the summer, climate change scientist Noah S. Diffenbaugh, professor of the Department of Earth System Science at Stanford University in Palo Alto, told The San Jose Mercury News, “2016 will break the global temperature record that was set in 2015, which broke the record that was set in 2014.” He was, unfortunately, only one voice in a crowd of experts and organizations who had already predicted that 2016 would be the hottest year ever recorded. The fuse leading to irreversible climate change is getting shorter.
Skepticism Regarding Human-Caused Global Warming Just Moved West
Here’s one more, this one from the popular Weather.com site: “Global mean temperatures in July 2016 were the warmest on record not just for July, but for any month dating to the late 1800s, according to four separate newly-released analyses.” NASA’s Goddard Institute for Space Studies also found that July 2016 was the warmest July in their dataset, which has 137-years of recorded climate data. Ever wonder how many scientists, weather experts, and organizations it takes to place this issue in its right context—as an existential threat to humanity?
It used to be the United States who led efforts to control fossil fuel emissions and slow down the rate of global warming, and emerging economies like China and India who opposed them. The Kyoto Protocol in the late 1990s saw these emerging economies demanding to “pollute” their way to economic growth. The Paris Agreement signed last year represented a major shift, and for a while, the largest contributors to global warming such as the U.S., China, India, and the EU seemed to be on the same page. As we begin 2017, it seems that the tables have turned; China has taken the lead in pushing for a sustainable world, while U.S. leaders are having “doubts” about whether human activity is changing our climate.
A Purely Economic Case to Abandon Climate Change Skepticism
Unfortunately, misinformation about climate change has clouded the minds of many people who can bring about action. To them, it does not matter that the vast majority (actually, the overwhelming majority) of climate scientists around the world agree—even if empirical data such as three record-breaking years of warming, the Arctic becoming navigable year-round, and rising sea levels confirm these scientists’ assertions. There is a more practical reason to abandon this skepticism and take action, and it has nothing to do with whether one accepts or denies the idea that humans cause climate change. The reason is rooted solely in economic principles.
Game Theory suggests we need to take urgent action, regardless of your position on climate change. Among the ideas behind Game Theory are behavioral economics based on ‘false positives’ and ‘false negatives.’ A ‘false positive’ means you believe something is true when it isn’t; a ‘false negative’ means you believe something is not true when it is. Let’s apply these principles to quantify the costs of either taking action or inaction regarding climate change.
False Positive: Humans Don’t Cause Climate Change, but the World Takes Action Anyway (Wrongly Believing We Do).
Let’s assume climate change skeptics are right: human activity has nothing to do with global warming, but they lose the argument, and we take action. We can take an educated guess as to the cost of this scenario. The 197 countries who committed to the Paris Agreement goal of keeping global temperature rise under 2° Celsius will respectively spend billions of dollars to comply by transitioning to sustainable energy faster. Let’s speculate and estimate the cost of this “unnecessary” action reaches $5 trillion (roughly the cost of the wars in Iraq and Afghanistan.) Let’s also add a decade-long slowdown in economic growth as a result of this hypothetical investment to hedge our bet on climate change. That puts the total cost of taking action while being wrong at $17 trillion (the size of the U.S. GDP).
False Negative: Humans Cause Climate Change, but the World Takes No Action (Wrongly Believing We Don’t).
Now, assume the opposite. Climate change skeptics are wrong: human activity does cause global warming, but they win the argument, and we do nothing. Based on climate projections, the point of no return comes; and the consequences we already see and feel today accelerate and become irreversible, no matter what we do after. Huge parts of coastal cities go permanently under water—including major economic centers such as New York, Hong Kong, Miami, and San Francisco. Billions of people are displaced by permanent drought (many of them in the developed world) with the inevitable wars and human suffering that forced migration always causes. Thousands of species of plants and animals go extinct. Catastrophic weather becomes the norm. By then, no amount of money can reverse these events, and this scenario becomes the new normal. The Earth enters an era of extreme weather that humans have not experienced since the last Ice Age. Can we put a price tag on Venice, Amsterdam or New Orleans lost to rising seas; Greece becoming a desert, frogs going extinct, or hundreds of consecutive seasons of Katrina-strength hurricanes in the Southeastern United States? Can human suffering on a scale never seen before be quantified? What comes after “trillion?”
Taking Action Because It is the Rational Thing to Do
Game Theory makes it evident that the latter scenario is so outrageously costly that spending $17 trillion to avoid it, even if the probability of it occurring is minimal, is a bargain indeed. In other words, the cost of taking action, even if you are right to be skeptical about climate change, is completely eclipsed by the cost of doing nothing and being wrong. If you are what economists call a “rational decision maker,” you hedge your bet and take action on climate change even if you do not believe humans are causing it because the cost of not doing anything and being wrong is catastrophic and irreversible.
Acting On Climate Change is Easy
Taking action to reduce carbon emissions without compromising on economic growth is now within our reach. Otherwise, the unprecedented global commitment to the Paris Agreement would simply not have been possible. Last week, we wrote about how zero-carbon energies such as solar, wind, and hydrogen can work together to overcome the historical challenges each has experienced on its own. In addition, technological development is now on an exponential curve regarding sustainable energy. Ongoing technical innovation in solar cell efficiency, wind energy output, and Hydrogen 2.0 will make clean economic progress affordable and possible.
Progress in the use of sustainable energy makes taking action a matter of will, not one of hope. Clean energy that is always available is the type of planet-saving energy strategy that is readily within our reach if we focus. It is one that rational people—climate change proponents and skeptics alike—should be demanding right away.
As the Hydrogen 2.0 ecosystem gains momentum, we’ll be sharing our views and insights on the new Hydrogen 2.0 Economy. We also update our blog every week with insightful and current knowledge in this growing energy field.