The White House
The Council of Economic Advisers released a report that examines the economic consequences of delaying implementing policies to reduce the pace and ultimate magnitude of these changes; the findings emphasize the need for policy action today. The report was written under the leadership of Jim Stock, who recently resigned as a Member of the Council of Economic Advisers to return to his teaching position at Harvard University.
KEY POINTS IN TODAY’S REPORT FROM THE COUNCIL OF ECONOMIC ADVISERS
1. Immediate action substantially reduces the cost of achieving climate targets. Taking meaningful steps now sends a signal to the market that reduces long-run costs of meeting the target.
2. Climate change stemming from delayed action creates large estimated economic damages. If delayed action causes the mean global temperature increase to stabilize at 3° Celsius above preindustrial levels, instead of 2°, that delay will induce annual additional damages of 0.9 percent of global output. To put this percentage in perspective, 0.9 percent of estimated 2014 U.S. GDP is approximately $150 billion.
3. The possibility of abrupt, large-scale, catastrophic changes in our climate increases the need to act. These large-scale events include the melting of the West Antarctic ice sheets and other ice sheets – which would cause large degrees of sea level rise – as well as the release of additional methane through thawing of permafrost, which would accelerate global warming.
4. Enacting meaningful change in climate policy is analogous to purchasing climate insurance. Much like other insurance purchased by individuals and businesses, paying mitigation costs now reduces the odds of a large-scale catastrophic change in climate. And, unlike conventional insurance policies, climate policy that serves as climate insurance is an investment that also leads to cleaner air, energy security, and benefits that are difficult to monetize like biological diversity.