Costs of burning fossil fuels dwarf costs of energy transition: Report

The Big Story 

Climate action is costly, but inaction could be far more expensive, according to a new report. 

© AP Photo/Joshua A. Bickel

The costs of enduring climate change are already six times higher than those for implementing measures to prevent it, a study published in Nature on Wednesday reveals.

The researchers projected an average total cost of $38 trillion by 2050 — and that’s the best-case scenario. 

No matter what actions world governments and businesses take, by mid-century, per-capita global incomes will be 19 percent lower than they would have been in a world unaffected by climate change. 

This cost could double if the world does not aggressively reduce fossil fuel consumption. 

“Climate change will cause massive economic damages within the next 25 years in almost all countries around the world, also in highly-developed ones such as Germany, France and the United States,” lead author Leonie Wenz of the Potsdam Institute said in a statement. 

Those shorter-term damages come from historic burning of fossil fuels, Wenz emphasized. If current burning isn’t rapidly cut down, “economic losses will become even bigger in the second half of the century.” 

This question of cost is timely: on Tuesday, the Vermont Senate passed legislation that would require the oil industry to help pay for the cost of climate adaptation.  

“Big Oil knew decades ago that their products would cause this damage,” state Sen. Anne Watson told reporters at the press conference advancing the bill. “It is only right that they pay a share of the costs to clean up this mess.” 

Meanwhile, in Congress, GOP members are pushing forward legislation to bar the federal government from requiring big companies from reporting their carbon emissions — a pitch they make based on the idea that such a retreat is too expensive for consumers.  

Many Republican-controlled state legislatures are also pushing to ban the public sector from doing business with banks that have long-term plans to reduce their fossil fuel footprint. 

Last week, the U.N. climate chief said that rising temperatures and oil use meant that the world had just two years to make the financial and regulatory changes “essential in saving our planet.”  

Despite growing global concern around climate change, oil and gas burning is now at record levels. 

To compile their forecast, the authors analyzed data from 1,600 regions worldwide, assessing the impacts of rising average temperatures, fluctuations between day and night temperatures, and the frequency of extreme weather events. 

The results highlight a stark injustice: countries with fewer resources, which have contributed the least to global warming, will suffer the most from declining incomes.  

Nations at higher latitudes—such as Russia, Scandinavia, and Canada — might see some economic benefits from climate change, as milder winters reduce heating costs and extend growing seasons. 

By contrast, countries closer to the equator — including India, Brazil, Nigeria, and much of Africa, Latin America, and Southeast Asia — will face disproportionately more significant economic damages.  

Those countries will face costs 60 percent greater than the high-income countries — and 40 percent above high emitters like the U.S. and China. 

But that doesn’t mean the global North will be immune — either from the direct impacts of climate change or the indirect costs.  

The paper found that even in the best-case scenario, incomes in the U.S. and Europe will face ” a permanent income reduction” of 11 percent by midcentury. 

In part, this comes from the direct impacts of climate change. Worsening drought, floods and storms will ravage U.S. and European farming regions, and more frequent and intense heat waves will drive up health care costs, as extreme weather spikes the price of insurance. 

In an interconnected world, impacts on one part of the globe will pull on the rest. U.S. markets and supply chains draw from resources — from chocolate and coffee to wood and minerals — from more afflicted regions. Climate change is reducing both harvests and people’s ability to work outside in ways that will stunt the economies of more prosperous trading partners.  

Then there is the political impact of what happens as people desert regions that can no longer support them, leading to a boost in humanitarian crises and migration that has already become a potent and divisive issue in the U.S. and European political systems. 

Finally, the researchers note the disquieting possibility that they have underestimated the costs the world faces: climate predictions, they said, tend to be conservative.  

And even where they are accurate, changes in average heat or rainfall often conceal an even starker increase in the size and power of extreme events, from hurricanes to heat waves. 

“Staying on the path we are currently on will lead to catastrophic consequences,” Anders Levermann, study coauthor and a researcher at the Potsdam Institute said in a statement.  

“The temperature of the planet can only be stabilized if we stop burning oil, gas and coal,” Levermann added.” 

Welcome to The Hill’s Sustainability newsletter, I’m Saul Elbein — every week we follow the latest moves in the growing battle over sustainability in the U.S. and around the world.

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AI vs Climate Change 

© Getty Images

The surging power demands of artificial intelligence (AI) and machine learning could be a net boon to the fight against climate change, but only if regulators handle them appropriately. 

According to a new report by the Lisbon Council, a nonprofit European think tank, the power demands of AI are expected to double by 2026 — from 2 percent to 4 percent of global electricity demand.  

The paper comes out amid a wave of reporting on the eye-popping power demands of AI. Rising interest in tools like Chat GPT and Google Gemini are driving a global buildout of data centers that is straining power grids in the U.S.  

That is leading utilities in regions like the Southeast to install new planet-heating gas power plants, which proponents say are one of the few current ways to ensure round-the-clock power — something renewable energy advocates argue could also be accomplished with wind, solar, batteries and more flexible demand. 

Despite this increase in demand, the authors argue that expanded computing power can significantly advance energy efficiency and climate science.  

It notes that AI training is becoming more energy-efficient, as evidenced by Nvidia’s recent introduction of the Blackwell chip, which uses 30 times less energy than previous generations. (Nvidia is a sponsor of the research.) 
 

This trajectory of energy efficiency is not guaranteed. In a phenomenon known as the Jevons Paradox, advances in energy efficiency in one area can lead to increased energy consumption because efficiency gains make potent technologies more accessible and widely used. 
 

To ensure the AI sector contributes positively to the climate, the researchers urge regulators to: 

• Enforce stricter reporting from data centers on their electricity consumption and energy efficiency.

• Evaluate energy usage in the context of computing power, ensuring that energy efficiency regulations also incentivize gains in computing performance.

• Collaborate internationally to establish global sustainable computing standards. 

On Our Radar 

Upcoming news themes and events we’re watching:

• On Wednesday, Texas-bases geothermal startup Bedrock Energy is showing off its new drilling rig, which will allow the company to use the stable temperature of the underground Earth to heat and cool buildings without releasing carbon.

• Bedrock is part of the growing Texas boom in geothermal energy, which uses the technology of oil and gas drilling to pull zero-emission heat from the subsurface, which can be used for industrial purposes or to generate electricity.

In Other News 

Branch out with different reads from The Hill:

US’s most endangered rivers are in New Mexico: Report

The rivers of New Mexico are the most threatened waterways in the country, according to a recently released report by advocacy group American Rivers.  

Full Story

Here’s what new LED lightbulb standards mean for American households

New standards for light-emitting diode (LED) lightbulbs announced by the Biden administration last week will likely mean measurable savings for American households, but experts say the bulbs last so long it may be years before consumers notice the benefits.

Full Story

Around The Nation 

Local and state headlines on sustainability issues:

• Why this vote at a Tennessee Volkswagen plant is historic for the South (NPR)

• Experts say Colorado pollinators declining due to climate change (CBS)

• How a tiny inland shore bird could help save the Great Salt Lake (Inside Climate News)

What We’re Reading 

Sustainability news we’ve flagged from other outlets:

• Al Gore thinks Trump Will lose and climate activists will triumph (The New York Times)

• Shell urges investors to reject shareholder group’s climate demands (Reuters)

• Ocean heat is driving a coral bleaching event that could be the worst on record (CNN)

What Others are Reading 

More stories on The Hill right now:

Do we still use the Richter Scale to measure earthquakes?

One of the most commonly known earthquake-measuring tools is the Richter Scale, but the system is no longer used today. Read more

The US is experiencing a boom in microschools. What are they?

Story at a glance There has been a surge in new microschools in the U.S. since the start of the COVID-19 pandemic.     The National Microschooling Network estimates there are about 95,000 microschools in the country. The median microschool serves 16 students. There is no regulatory body solely responsible for tracking microschools, … Read more

What People Think 

Opinions related to sustainability submitted to The Hill:

• Expect financial fallout when the fossil fuel bubble finally bursts

• Conspiracies and cynical indifference are the right’s latest climate strategy

• After climate tipping points, change will come slowly, then all at once

You’re all caught up. See you next week! 

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