TPT September 2014

Global Marketplace

the impending perils of a changing climate. Their report, taken together with several other recent high-level assessments, contributes to a new picture of climate change. It is not encouraging. “Taking Effective Action Against the Unstoppable,” the title of the Economic Scene column in the New York Times for 24 June, catches the tone of the message to American business in Risky Business . The hour is late. You start from well behind. Wrote columnist Eduardo Porter, “[It punctures] the hopes held by some of the most uncompromising environmentalists and the most compromising politicians that humanity can still prevent climactic upheaval if we only start replacing fossil fuels today.” P ERILS WITH PRICE TAGS As the Risky Business report lays out in detail, climate change over the next few decades is a given. Temperatures will go up. Reducing carbon emissions now is about helping prevent even more serious damage 50, 75 and 100 years from today. To address the more immediate risks, Trevor Houser, who heads the energy practice at the Rhodium Group, the economic modelling firm that performed the risk analysis for the Risky Business report, told the Times that the best we can do is “invest in adaptation.” To that end, the Risky Business Project analysis dispassionately lays out damages to specific places and economic sectors along a probability curve as temperatures rise and we continue emitting carbon dioxide into the atmosphere at the pace of recent decades. While some remedies are offered, the main thrust is to identify the perils that lie ahead and to put a dollar value on them. By 2100, up to $507bn worth of coastal property in the US will be under water. There will be flooding in New York; drastically reduced crop yields in the Southwest, Midwest, and the lower Great Plains; declining productivity as workers stay indoors, out of the sun; energy costs rising by thousands of dollars per person. › To Mr Porter, these consequences are more persuasive than the “abstract, abstruse” estimate published in April by the Intergovernmental Panel on Climate Change. This holds that keeping the temperature from increasing more than two degrees Celsius above that of the pre-industrial era will cost up to 11% of consumption by 2100, in a world economy that would be three to nine times as large as today’s. For the proprietor of the Times ’s Economic Scene column, the obvious question – for corporate chieftains, business leaders, and the American voting public – is: What is it worth to them to avoid such costs? › Henry M Paulson Jr, a former US Treasury secretary and participant in the Risky Business Project, has laid out an action plan centred on a tax on carbon emissions. Professor Michael Greenstone of the Massachusetts Institute of Technology supports a tax coupled with a major expansion of investment in research to develop cost-competitive technologies, which the US could also make available to the big polluters of the future: China and India. Will the “realistic, detailed and nuanced” work of the Risky Business Project compel action, on these and other initiatives? “Don’t hold your breath,” was Mr Porter’s advice.

The ‘Risky Business Project’

There has been no comprehensive assessment of the economic risks the US faces from human-induced climate change – until now “Damages from storms, flooding, and heat waves are already costing local economies billions of dollars. We saw that first-hand in New York City with Hurricane Sandy. With the oceans rising and the climate changing, the Risky Business report details the costs of inaction in ways that are easy to understand in dollars and cents – and impossible to ignore.” Michael R Bloomberg, an entrepreneur and philanthropist who served three terms as mayor of New York City, from 2002 through 2013, was introducing a report aimed squarely at corporate America. Risky Business: The Economic Risks of Climate Change to the United States, released on 24 June, uses a standard risk-assessment approach to determine the range of potential consequences for each region of the USA, as well as for selected sectors of the economy, if Americans persist in their current ways. Mr Bloomberg is co-chair of the Risky Business Project, a coalition of political and business figures in the US who are intent on raising awareness about

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