Study Says Arctic Ice Melt to Cost Global Economy $2.4 Trillion

Experts say estimating dollar cost of global warming devilishly complex.

February 5, 2010, 12:55 PM

Feb. 5, 2010— -- On one hand, it is a very, very round number -- obviously just a rough and imperfect estimate of the economic impacts of an enormously complex and often unpredictable jumble of warming Earth climate systems.

The financial cost to the world economy of a warming and melting Arctic, due to human induced greenhouse emissions over the next 40 years, will add up to at least $2.4 trillion, according to a study by the Pew Environment Group.

That's a 24 followed by 11 zeroes.

To get this figure, Pew researchers accumulated and combined estimates of the monies, both public and private, that will be spent -- or lost -- as the rising global heat brings drought to fields, new demands on energy plants, migration away from sea shores (prompted by what some studies estimate could be at least a 4-foot rise in sea levels this century), infrastructure and trade losses due to severe flooding as well as insurance losses related to all of these.

"As a first cut, I find the study sort of interesting," environmental economist Gary Yohe of Wesleyan University, and a lead author of the Intergovernmental Panel on Climate Change, told ABC News. He also pointed out that over the past decade there have been some 300 studies trying to estimate the dollar cost of global warming. (This Pew study treats only the Arctic.)

And, notes Yohe, one survey of all those studies found that 12 percent of them concluded that there would be a positive economic impact of global warming in coming decades.

That still leaves 88 percent of the studies saying warming costs would be in the red. Some of the studies concluded that global warming will be extremely damaging to the world's economy as mid-century approaches.

The point is, this a complex and necessarily speculative field of study.

Yohe also points out that the $2.4 trillion estimate, spread out over the next 40 years, may end up being but a fraction of 1 percent of what the cumulative global GDP could well be by then.

Estimates about the impact of Arctic warming are incomplete since, as the Pew study authors warn, some of the major Arctic Earth systems that will affect world economy cannot be assessed with exactitude.

These unknowns include:

In addition, as we've been hearing for some years now, studies have shown the Arctic is warming twice as fast as the rest of the world, further complicating the calculating.

Pew Study Says Cost of Melting Arctic Ice $2.4 trillion

Trying to put a hard dollar sign on the cost to humanity of global warming, devilishly difficult though it may be, is at the core of the issue.

Hard economic choices are facing leaders of the world's economies as temperature rise accelerates. They clearly need all the help environmental economists can give them.

This study borrows estimates from other studies that have tried to put dollar costs to the global economy on each ton of invisible greenhouse gas emitted anywhere on the planet.

Researchers considered three primary Arctic systems that impact global climate:

These Arctic systems that reflect light and trap greenhouse gases are generally described by climate scientists as "the planet's northern air conditioner." Their diminishment bodes more global warming.

"The Biggest Unknown" ... Is Us

Yohe points out that adding to the various uncertainties about these areas of economic activity are the other basic unpredictable elements of climate change -- especially how humans will affect it.

Economists, like the computer experts who try to "model" how fast and far the temperature will climb over the coming decades, often point out that amid their swarming clouds of data, the single biggest unknown is "what will humans do?"

How much greenhouse emission will humanity finally agree on cutting -- and then actually succeed in cutting?

Nor do scientists know precisely how much warming will result from a given increase in CO2 ( though they do have a general range of estimates and seem to be improving their ability to measure the atmosphere's "sensitivity" to CO2.)

Also unknown is how much money humanity will end up spending to adapt to the warming it cannot prevent.

Given all these unknowns, any discussion of just how much humanity will have to pay in dollars for a melting Arctic quickly gets down "in the weeds" of economics arcana.

But as demonstrated by the work of Yohe and his colleagues around the world -- including the economists and scientists who authored this Pew study -- humanity now has no choice but to face the potentially massive cost in dollars of having gone so long putting no cost on the invisible emissions of CO2.

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