Negotiators recently reached a landmark agreement at the Paris climate conference, but the national policy pledges that underlie this deal are voluntary and largely unenforceable. The success of the pact will depend on individual countries’ appetites for bold, concrete emissions reductions.
In the United States, lawmakers and presidential candidates must decide how to balance estimated climate damages against the costs of action. Some claim that aggressive climate policies will doom our economy. Economists disagree.
In the lead-up to the Paris conference, we surveyed a large sample of expert economists – all those who published an article related to climate change in a highly ranked economics journal over the past 20 years. We asked for their views on likely climate change impacts and appropriate policy responses, and we received 365 completed surveys (roughly a third of the group responded – a strong response rate for this type of survey). Research suggests that the “wisdom of the crowd” of an expert group is more accurate than the views of any individual or subgroup, and we hoped to clarify the expert consensus on these critical issues.
Our findings revealed widespread agreement that climate damages will be more severe and more immediate than previously estimated, and that aggressive climate policies are economically desirable (93 percent of respondents supported immediate action). According to these experts, economic turmoil could be looming. The Paris agreement is a step in the right direction, but we could face major problems if the U.S. and other countries don’t quickly ramp up efforts to cut emissions.
Climate change is often discussed as a problem for future generations, but the economists we surveyed believe that it will begin to have a net negative impact on the global economy very soon – the median estimate was “by 2025,” with 41 percent saying that climate change is already negatively affecting the economy.
Respondents also predicted much larger economic impacts from climate change than many past studies have estimated. The Paris agreement aims to limit temperature change to less than 2°C, but the policy pledges that countries submitted for the conference would lead to more than 3°C of warming before the century ends. When asked to predict the economic impact of a 3°C increase by 2090, our respondents estimated a global GDP loss of roughly 10 percent. Strikingly, these experts also believe that there is greater than a 20 percent likelihood that this same warming scenario could lead to a “catastrophic” economic impact (defined as a global GDP loss of 25 percent or more, akin to the Great Depression). Additionally, nearly 80 percent of the economists we surveyed believe that climate change will have a long-term, negative impact on the growth rate of the global economy.
Given these dire predictions, it’s not surprising that these experts expressed higher levels of concern about climate change than the general public, when asked identical survey questions. Some pundits have portrayed economists as being relatively conservative about climate change policy, possibly due to their knowledge of mitigation costs and market-driven adaptation. Our findings belie this notion.
These economists believe that bolder action on climate will be economically beneficial for Americans. When asked which sectors of the U.S. economy will be harmed by climate change, a large majority predicted negative impacts on agriculture, fishing, utilities, forestry, tourism, insurance, and health services. Perhaps due to these risks, more than three-quarters of respondents believe the United States should commit to reducing greenhouse gas emissions regardless of the actions taken by other countries. And more than 80 percent believe that the U.S. could induce other nations to cut their emissions by adopting policies to limit U.S. emissions. Opponents of domestic climate policies often suggest that the U.S. will be stuck with the bill while other countries do nothing. But economists seem to think that U.S. action is likely to spur international cooperation – creating additional benefits for the American public.
Any economist will tell you that disagreement is a hallmark of the discipline, but we found a surprisingly high degree of consensus on many critical topics. Congress continues to agonize over any proposed climate policy, but it’s clearer than ever that more action is needed – above and beyond what the U.S. promised in Paris. And according to the economists who’ve studied these issues, the economic case for strong, near-term U.S. climate action is compelling.
Howard is the economics director at the Institute for Policy Integrity at NYU School of Law, where Sylvan is the strategy director.