In Brief: ‘Net Zero’ Fails the Cost-Benefit Test
As another climate summit opens, two new studies show that extravagant climate promises are far more wasteful than useful.
The Left’s real climate agenda is green on the outside, red on the inside. It’s totalitarian control over virtually every aspect of our economic lives. Bjorn Lomborg is a longtime critic of that agenda, though he isn’t averse to taking some measures to mitigate climate change. In light of the beginning of the UN’s COP28 climate summit — minus Joe Biden — he explains a basic economic lesson.
World leaders are gathering in Dubai for another climate conference, which will no doubt yield heady promises along the lines of the 2015 Paris climate agreement to keep the global temperature’s rise “well below” 2 degrees Celsius and pursue efforts to limit it to 1.5 degrees. But they’d be wiser not to. New research shows how extravagant climate promises are far more wasteful than useful.
A new special issue of the journal Climate Change Economics contains two ground-breaking economic analyses of policies to hold global temperatures to 1.5 degrees and its practical political interpretation, mandates to reach net zero, usually by 2050. Though more than 130 countries, including most of the globe’s big emitters, have passed or are considering laws mandating net-zero carbon emissions, there’s been no comprehensive cost-benefit evaluation of that policy — until now.
Lomborg proceeds to briefly unpack this research. The first one presents an “underwhelming” case for restrictions to maintain lower temperature increases, and Lomborg says even the “substantial” are likely underestimated by as much as half. “In real life,” he says, “climate policy has been needlessly expensive, with a plethora of inefficient, disconnected measures such as electric-vehicle subsidies.”
This is borne out in the second Climate Change Economics study. The peer-reviewed paper from MIT economists identifies the cost of holding the temperature’s rise below 1.5 degrees as well as that of achieving net zero globally by 2050. The researchers find that these Paris policies would cost 8% to 18% of annual GDP by 2050 and 11% to 13% annually by 2100.
Climate economic models all show that moderate policies make sense — initial carbon cuts are cheap and prevent the most damaging temperature rise — but net zero doesn’t. Averaged across the century, delivering the Paris climate promises would create benefits worth $4.5 trillion (in 2023 dollars) annually. That’s dramatically smaller than the $27 trillion annual cost that Paris promises would incur, as derived from averaging the three cost estimates from the two Climate Change Economics papers through 2100.
In other words, each dollar spent will avoid less than 17 cents of climate damage. The total, undiscounted loss over the century is beyond $1,800 trillion. For comparison, global GDP last year was a little over $100 trillion. Although well-intentioned, current climate policy would end up destroying a sizable fraction of future prosperity.
He concludes that although this research and the track record of climate intervention is persuasive, “a serious cost-benefit discussion isn’t likely to make the Dubai agenda.”
Wall Street Journal subscribers can [read the whole thing here[(https://www.wsj.com/articles/net-zero-fails-the-cost-benefit-test-paris-climate-accord-cop28-748ae52d).