HOW EXPENSIVE
IS IT TO FIGHT
CLIMATE CHANGE?
N
umerous studies over the decades have
explored that question. Germany has
a clear answer: A study by the Federal
Industrial Agency estimates it will take total
investments of $2.56 trillion by 2050—which
breaks down to almost $85 billion per year.
The situation in the United States is far more
nebulous. In the spring of 2015 the Obama
Administration had formally committed to
reducing greenhouse gas emissions by up
to 28% below 2005 levels by the year 2025
as part of a laudable objective of reducing
climate-devastating emissions by 80% or
more by 2050. The current administration,
however, has announced that the U.S. will
officially withdraw from the Paris Climate
Agreement on the day following the 2020
election if President Trump is re-elected,
which puts any meaningful action in doubt.
In 2006 the UK government released the
Stern Review on the Economics of Climate
Change, a 700-page report on the effects
of global warming on the world economy.
The report stated that the cost of reducing
emissions could be as little as 1% of global
GDP if immediate action were taken. But in
the absence of action, that could rise over
time to more than 20% of GDP. If that’s true,
the worldwide cost in 2020 terms would be
more than $17 trillion annually.HOW DO COMPANIES
PROFIT BY DENYING
CLIMATE CHANGE?
E
mitting CO 2 has to become expensive,”
says Joachim Wenning, chairman of the
board of management of the Munich Re
Group, one of the world’s largest reinsurers.
Munich Re has been investigating the cost
and repercussions of climate change since
the 1970s. Wenning confirms environmental
agency estimates that a ton of CO 2 causes
damage of around $200. That is far more
than corporations currently pay in carbon
taxes in the countries that impose them. (At
present Germany charges only $25 per ton,
while Switzerland charges $90 for each ton.)
In addition, the exploitation of fossil fuels is
still subsidized in many countries. According
to conservative estimates, the U.S. directly
subsidizes the fossil fuel industry to the tune
of $20 billion per year (“your tax dollars at
work”), while the European Union subsidies
are estimated to total more than $60 billion
annually. The subsidies make the continued
extraction of fossil fuels more feasible and
attractive. Munich Re’s Wenning would like
to see corporations having to pay a carbon
tax of at least $128 per ton—a figure that
might encourage them to seriously consider
the transition to renewable energy.“ eading climate scientists
agree: If we intend to halt
climate change and stave
off the catastrophic effects
that are sure to accompany
it, we must reduce our per
capita emissions of CO 2
to no more than 2 tons per
year. The problem: In 2016
the United States emitted about 15 tons
of CO 2 per capita—a level of emissions
that’s almost 70% higher than Europe’s
worst emitter, Germany, and more than
three times higher than the world average.
Air travel weighs heavily on our personal
CO 2 emissions burden, though a private
car produces about a pound of CO 2 per
passenger mile while air travel produces
half that and commuter rail only a third
as much. Nevertheless, airlines have a
significant impact on the environment.
According to data from the European
Union, the Irish low-cost carrier Ryanair
is among the 10 biggest polluters in
the EU. The airline emitted more
than 10 million tons of carbondioxide in 2018—an increase
of nearly 8% over the previous
year. It was outstripped only
by coal-fired power plants.
Among 20 airlines that were
studied by the London School
of Economics, those that have
the best emissions records are
EasyJet, Alaska Air, and Qantas.
The worst three are Korean Air,
Lufthansa, and Singapore Airlines.
The report also commended Delta
and United for “taking a strategic
approach to the problem of climate
change.” Among the factors that
contribute to airline fuel efficiency
are the average age of aircraft (efficiency
has improved by around 10% in recent
years), the number of passengers who
are being transported at once (the more
the better), and the balance of long-haul
and short-haul flights (long-haul flights
burn a bit less fuel per passenger mile).
Fortunately, the study has discovered a
downward trend in fuel consumption for
all the airlines studied.HOW BIG A THREAT
TO CLIMATE DOES
AVIATION POSE?
L
May 2020 26 ideasanddiscoveries.com