For all of the discussion around the dangers of climate change, one issue is often forgotten - the cost of fixing the problem. Cutting carbon emissions enough to halt changes to the Earth's atmosphere is likely to prove extraordinarily costly. So much so that the process is going to put a huge financial burden on many nations and keep billions mired in poverty. That's the conclusion of M.J. Kelly, a leading engineering professor and scientist with Cambridge University in a recently published study.
Dr. Kelly also sees the Paris Climate Accord as irrelevant from a climate change perspective, with the quest to reduce carbon emissions being at best costly, and very likely quixotic. Kelly sees carbon cuts as having a devastating effect on modern life around the world. Kelly's views, while not shared by many other scientists, are based on a cost perspective rather than a view on the process of global warming. Kelly concludes that global warming is occurring, but rather than being as detrimental as many experts fear, he sees it instead as having a significant beneficial effect on fertilization and crop yields.
Kelly's conclusions are notable in that they coincide with a recent report by the International Energy Agency. In that report, the IEA called for "concrete action" to address climate change in the wake of last year's accord which was ratified by almost 200 nations. The IEA cites "massive changes in the energy system" that are needed to meet the goals of those accords. The IEA cites the cost of those changes and the required decarbonization as being roughly $9 trillion. For reference, that's roughly ten times the amount of money invested by the United States in the wake of the financial crisis - actions which led to numerous protests about bailouts of Wall Street banks and financial institutions.
Further, an additional $6.4 trillion would be needed to make other industries more environmentally friendly in order to help sustain low carbon trends. Given that level of costs, it's unclear where the money would come from. Outside of the U.S. and Western Europe, most of the world is still quite poor with many denizens living in third world conditions. Unfortunately, the costs of decarbonizing are too great to be borne by the U.S. and Western Europe alone. The total wealth of the U.S. for instance - including stocks, bonds, bank accounts, real estate, everything - is roughly $85 trillion. It's unclear that the country is going to be willing or able to give up 20 percent of its total wealth to help the rest of the world. Related: Oil Supply Disruptions Highest In Five Years
Dr. Kelly argues that carbon dioxide should be considered a product of the immense benefits of a technologically advanced society, and that cutting carbon could result in a dramatic reduction in the world's quality of life ushering in mass famine, poverty, and war. Kelly says "humanity is owed a serious investigation of how we have gone so far with the decarbonization project without a serious challenge in terms of engineering reality".
He goes on to say that "Everyone assumes that every change is for the worse, but we are starting to find upsides" in carbon dioxide, he said. "The recent science is casting doubt on whether more CO2 is necessarily a bad thing."
Kelly's views are still very much out of the mainstream, but he has a good point about the costs of changing not only the existing infrastructure around the world, but also the path to greater prosperity for the emerging parts of the third world. Those costs will be enormous - unlike anything the world has ever attempted. In that sense, it's not a bad idea to make sure that investment is being well spent and to consider plan B choices.
By Michael McDonald of Oilprice.com
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Michael is an assistant professor of finance and a frequent consultant to companies regarding capital structure decisions and investments. He holds a PhD in finance… More
Comments
Dr. Kelly, transitioning away from burning carbon needs to happen even if you don't consider planet warming and extreme weather. Do you like to fight over oil with other countries? Do you like supply and price volatility? Have you noticed that new types of oil supply are much more expensive than legacy oil? How much do you like to breathe, eat and drink the byproducts of oil combustion and leakage?
For many reasons, we need to transition away from burning oil. Dr. Kelly, please consider all of the reasons. The developing world will increasingly bypass central power production and oil pipelines. They will avoid resource wars and expensive central infrastructure by developing local alternatives to burning fossil fuel.
"Dr. Kelly argues that carbon dioxide should be considered a product of the immense benefits of a technologically advanced society, and that cutting carbon could result in a dramatic reduction in the world’s quality of life ushering in mass famine, poverty, and war." As if the world is not already in the throws of abrupt climate change that we have been doing NOTHING about, even though we have known its dangers for decades. Stop giving these people air time and start accepting the utter destruction we, as a society and especially the fossil fuel industry, have caused around the globe.
The issue is METHANE RELEASE IN THE ARCTIC. The scientists appear to be totally oblivious that the amount of releasing methane is almost as powerful as the CO2 in the atmosphere and yet, the methane is approaching 3 ppm to the 408 ppm for CO2. The only way to stop the methane is to Refreeze the North Pole. That is the only way to get the methane to stop coming out of the permafrost and up from the sea floor in the shallow waters of the Arctic Ocean.
A few favorable volcano eruptions and massive geo-engineering can do it. It would probably cost about a hundred Billion Dollars, but we can save the Earth and the people on it.