First of all, yes, different studies serve different purposes, and we do need narrowly focused studies of all sorts. However, one of the things that most irks me professionally is the horrible way in which researchers, reporters, politicians, and everyone in between discuss the “costs” of a clean energy transition or clean energy revolution.
If you paid attention to the questions I posed to Connie Hedegaard at the World Future Energy Summit last week, I think you might well know where I’m headed. And it’s nice to see that she and at least a few others are doing it right. But most people (especially influential people) still are not.
Today, the example of horrible communication is a World Economic Forum and Green Growth Action Alliance report (with good intentions and good research) on the topic of how much we will have to spend on clean energy to avoid “too catastrophic” and out-of-control climate change. What was so bad about it? It didn’t mention the second half of the equation! Or the second part of the sentence, if you prefer to word it like that.
It actually came to a very exciting finding: $700 billion more investment (than we are currently putting in) is needed to avert “climate catastrophe,” but only $34 billion more in public funding is needed to hit that. To put that in perspective, that’s “less than the US$50 billion recently approved by the United States Congress for rebuilding resilience after Hurricane Sandy,” just one of the many tremendous climate catastrophes we’ve seen and will continue to see. Great messaging to make that note!
However, the huge point it neglected to mention was that the costs of not investing this $54 billion, or the $130 billion total they have pegged for necessary public investment (which many will rightfully see as a huge amount of money), are dwarfed by the costs of not getting our climate under control. Perhaps they assumed that was obvious — a given — but the Reuters article covering the report didn’t make note of that until the very last line (when it finally noted that the cost of inaction is projected to be much greater than the cost of action), and many or most readers won’t connect the dots. Most readers won’t realize that spending $54 billion, or $130 billion, or even $700 billion if you include the private investors, is much less than the trillions upon trillions that society will pay under a “business as usual” scenario. Most readers won’t realize that this choice is something like paying $7,000 for a Rolex versus $100 for a typical watch… and then having the Rolex and your wrist smashed in an accident the day you buy it. Even that doesn’t really capture the suffering humanity will go through from not stopping climate change, or the scale of the costs.
Another huge point that the report authors, those who wrote the executive summary, and the Reuters reporters didn’t mention, is that fossil fuel companies get over $1 trillion in subsidies per year! That is about 20 times more than the extra amount the report above says governments need to invest in clean energy (and much more than clean energy currently gets). And that still doesn’t even take into account the health costs of burning fossil fuels, which are even greater than $1 trillion a year! That doesn’t even take into account historical subsidies for fossil fuels, which would dwarf that $54 billion figure, or the $130 billion figure.
In other words, $54 billion of investment, or even $130 billion or $700 billion of investment, is chump change compared to the economic benefits that will come from averting the worst that climate change is ready to dish up for us. I can’t even come up with an analogy that puts that into perspective. It’s about like each of us only having to spend $7.71 to avert total societal collapse and possibly unlivable temperatures. Worth it? Of course it is. Presented in that way, anyone could choose the right option.
The World Economic Forum / Green Growth Action Alliance study — The Green Investment Report: The Ways and Means to Unlock Private Finance for Green Growth — is great. The results are great. But the messaging is horrible, and the public will be confused, will get the wrong picture… as is the norm with this topic.
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