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What happens to the economy when temperatures rise around the world?
Editor's note: 7 Deadly Stories is a GlobalPost series on the main drivers of the global economy, all of which are facing severe challenges at once. Will the U.S. economy relapse? Is Europe finished? Will China, Inc. crash? Can Japan recover from disaster? How will the Middle East emerge from the ashes? How did the world become awash in debt? What is the true cost of climate change? These are the stories that are pushing the world economy, once again, to the brink.
BOSTON — Admittedly, it is a rather difficult proposition: to put a price on climate change.
Even the numbers people don’t want to put a number on it. It’s very complicated, they say, and largely dependent on uncertainties like when and where the world’s worst-ever storm will hit.
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But dollar signs tend to drive the point home, especially when they come before, say, 13 figures. And so it is with climate change.
Deciding the cost of a heatwave — like the one that recently swept the United States — helps determine how quickly something is done about it.
In other words, numbers drive policy.
Here's another uncomfortable, and inconvenient, truth about climate change:
As the U.S. struggles with economic malaise, as Europe digs out of debt, the Middle East rises up and Japan and China confront economic challenges of their own, environmental problems are on the march.
This is making life harder by adding economic costs, political complexities and additional human suffering to just about every corner of the planet.
These challenges were evident last year, when the U.S. Congress failed to pass climate legislation. Among the many heated criticisms of the climate bill was that it would devastate an already crippled economy by raising taxes and causing even more people to lose their jobs.
In response, the Obama administration focused more on the positive effects of investing in clean energy than on the devastating effects of dying livestock and rising sea levels.
What was hardly discussed at all was the cost of doing nothing.
“It’s pretty clear that the cost of inaction will far, far exceed the cost of action,” Steve Herz, an attorney with the Sierra Club’s international climate program, said last week.
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Let’s revisit the U.S. heat wave for a moment. It is in no way the worst byproduct of climate change, but it is one for which specific numbers are readily available.
The Atlantic published a punchy piece that broke down the costs.
So, for example, crop failure pushed the price of corn to all-time highs, peaking in June at $7.80 a bushel (it’s usually more like $4.20).
In terms of beef, the heat may not raise the price because it tends to also decrease the demand. But the heat does kill the cows. Farmers in the Midwest reported serious losses. In Illinois alone, as many as 4,000 cattle died in the recent heat.
People tend to die in the heat, as well. The National Weather Service reported that as many as 64 people died in 15 states in late July. And that is just one heat wave, in a developed country.
Now multiply that by climate problems across the globe — from record droughts in China, to bigger storms in Bangladesh, to rising sea levels caused by melting glaciers and ice caps, and more — and the extent of the challenge become clear.
Or does it?
“The stuff we can measure is already really bad,” said Laurie Johnson, chief economist at the National Resources Defense Council’s climate center, in an interview with GlobalPost. “But the stuff we can’t measure is so much more awful.”
It is very difficult to monetize, for example, the loss of an entire island nation subsumed by the sea or all the world’s coral reef.
Tens of thousands of lives have been lost this year in Somalia due to the worst drought that country has experienced in six decades.
Scientists used to be wary of correlating a single, record-breaking storm with climate change.
But trends are now emerging in which record-breaking events continue to happen over extended periods of time. And scientists like trends.
The Washington Post reported last week that 2011 is now tied with 2008 for the most billion-dollar weather disasters in the United States — and hurricane season is yet to come.
The flooding of the Missouri River, which is ongoing, pushed 2011 over the edge, causing up to $4 billion dollars in damage so far.
Worldwide, German reinsurer Munich Re said 2011 has already in the first half of the year accumulated the most losses to date, though a big chunk of that is attributable to the punishing costs associated with Japan's Mar. 11 earthquake.
“US$ 265 billion in economic losses up to the end of June easily exceeds the total figure for 2005, previously the costliest year to date (US$ 220 billion for the year as a whole),” the company wrote in a July release.
Sir Nicholas Stern, a British economist, in a 2006 climate change report commissioned by the U.K. government, concluded that failure to reduce greenhouse gas emissions would trigger up to a 20 percent drop in the world’s GDP by 2050, whereas the cost to the global economy of tackling the issue head on would be just over 1 percent.
Inaction means we would continue on our current trajectory, which most climate scientists agree means our planet will warm an average of 4 degrees Celsius (7.2 degrees Farenheit) by 2060 or 2070.
What does all of this mean on the ground? What does Lord Stern’s “market failure on the greatest scale the world has seen” actually look like?
In other words, very bad things happen.
(Saanya Gulati contributed to this report)
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