Worsening inequality, trillions of dollars in economic damage and depressed economic growth. Those are the outcomes that economists fear we will face unless the world aggressively confronts the climate crisis.
Nearly three-quarters (74%) of economists agree “immediate and drastic” action is warranted to curb emissions, according to a survey released Tuesday from the Institute for Policy Integrity at the NYU School of Law.
That’s up sharply from 50% in 2015. Since that time, the United States has been hit by an onslaught of extreme and deadly weather events including Hurricane Maria, massive wildfires in California and this year’s deep freeze in Texas.
With those floods, wildfires and hurricanes occurring more frequently, the financial toll from the climate crisis is expected to rise dramatically: Economic damage from climate change is projected to reach $1.7 trillion per year by 2025 and surge to roughly $30 trillion annually by 2075 under most scenarios, according to consensus forecasts included in the survey.
That’s why economists broadly agree with what scientists have been saying for years: The costs of doing nothing are far higher than the price of breaking the world’s addiction to fossil fuels. About two-thirds of the NYU survey respondents said the benefits of reaching net-zero emissions by mid-century are likely to outweigh the costs.
“People who spend their careers studying our economy are in widespread agreement that climate change will be expensive, potentially devastatingly so,” Peter Howard, economics director at the Institute for Policy Integrity, said in a statement.
The institute said the survey is likely the largest of its kind. The authors reached out to 2,169 economists who have published articles related to climate change in a highly-rated economic journal. Among the 738 who responded, nearly 80% reported an increase in concern about climate change.
Biden makes his climate pitch
The report comes as President Joe Biden prepares to pitch a sweeping infrastructure and jobs package Wednesday that includes major investments in climate infrastructure, research and development. The Biden proposals will total between $3 trillion and $4 trillion, senior administration officials previously told CNN.
The White House is hoping to convince the public and lawmakers that bold action on the climate crisis will pay off in the long run — and create good-paying jobs that can help the fossil fuel workers whose careers are threatened by the shift to clean energy.
Seventy-six percent of economists in the NYU survey expect climate change to hurt not just economic output, but the growth rate of the global economy.
At the same time, 70% of respondents say climate change will increase inequality within most countries, expanding the already-alarming gap between the richest and poorest populations.
Investors are betting on clean energy
As Washington deliberates next steps, Corporate America and Wall Street are stepping up efforts to address the climate crisis.
In a bid to reduce drivers’ environmental footprint, Google Maps announced Tuesday that its driving directions will soon default to the most fuel-efficient route.
Volkswagen is so serious about its big bet on electric vehicles that the auto maker’s US arm is changing its name to “Voltswagen.”
That move makes sense given the staggering sums of money investors are pouring into clean energy solutions, with the skyrocketing share price of Tesla making Elon Musk the world’s second-richest person.
The fossil fuels industry, by contrast, is in disarray. Coal companies are grappling with falling sales, mass layoffs and bankruptcies. The S&P 500’s energy sector, dominated by oil-and-gas companies, lost more than a third of its value last year, continuing more than a decade of weak performance. The energy industry has rebounded somewhat this year, boosted by higher oil prices.
Meanwhile BlackRock and Vanguard, the world’s two largest asset managers, announced Monday that they are joining an effort to limit greenhouse gas emissions to net zero by 2050. The Net Zero Asset Managers initiative is now backed by funds with $32 trillion in total assets.
“Helping investors prepare their portfolios and capture investment opportunities on the path to net zero is one of our greatest responsibilities,” BlackRock CEO Larry Fink said in a statement.
In recent months, Wells Fargo, Goldman Sachs, Citigroup and other major banks have also announced net zero goals, including from the companies and projects they finance.
“It doesn’t take a scientist to notice our clients are affected by changes in climate,” Jon Weiss, CEO of corporate and investment banking at Wells Fargo, told CNN Business earlier this month.