The economist's view: Dealing with climate will be costly, but worth it

As world leaders haggle over climate commitments in Glasgow, Scotland, climate watchers are looking for signs of progress — or lack thereof.  Organizers of the United Nations Climate Change Conference, known as COP26, say their aim is to "accelerate action" toward meeting goals of the 2015 Paris Agreement. That means adopting concrete steps to limit global warming. 

Environmental economist Jared Woollacott has been following the talks. He gives the classic economist's answer when asked if he's optimistic: yes and no. That is, he sees reasons for both concern and hope.

RTI International

"As an economist, I'm supposed to be pretty skeptical and not that optimistic," said Woollacott, who works at the nonprofit research firm RTI International in Durham. "We have made good progress so far, in getting to initial agreement and setting targets." 

But he said those targets — for things like reducing carbon emissions from energy and transportation — need to be "more aggressive and more clearly defined." And we need defined steps toward those goals, and plans for paying for them, Woollacott said.  

Among the topics being discussed at Glasgow is putting a price on carbon, which would be one of those concrete steps. Basically, that means charging polluters a fee, to spur changes.

There are already some systems in place, like the 11-state Regional Greenhouse Gas Initiativeon the U.S. East Coast. That's a carbon marketplace that creates an incentive to reduce emissions by allowing companies to buy and sell carbon credits — basically the right to emit.  If you cut emissions, you get rewarded. If you don't, you have to buy credits, which raises the cost of doing business. 

North Carolina does not belong to RGGI, but regulators agreed this summer to consider joining.  But there's a long way to go before that happens, if it ever does. 

Another critical issue in Glasgow is equity, or how the costs of climate change are shared among rich and poor nations, Woollacott said. Countries in the developing world have far lower levels of carbon emission, but also suffer some of the greatest negative effects of pollution beyond their borders.

"Certain climate impacts we know will adversely impact certain populations, certain countries, more than others," Woollacott said. "Is there consideration for that fact? Is there consideration for historical responsibility?"

Again, yes and no. Leaders of developed nations in 2009 agreed to provide developing countries with $100 billion a year for what's called "loss and damage."  But that was supposed to begin last year, and it remains just a pledge. 

"It's really important for us to have our eyes on (the need to) provide support for adaptation and resilience," Woollacott said. "That is, how can we help populations avoid the impacts of climate change? And then for those that can't avoid (it), how can we help them bounce back quicker? How can we help them survive a hotter climate, a drier climate, or, you know, increased flooding? 

"Those sort of issues are much thornier. And I think we'll take successive rounds (of COP climate meetings) before we get more clarity there."

Glasgow has produced some notable announcements. Nations representing about 85% of the world's forests signed an agreement to limit deforestation — and to preserve one of our best tools to reduce carbon dioxide emissions, our trees. That comes with about $19 billion in public and private funding.

And 40 mostly smaller countries agreed to end the use of coal for energy. But that deal did not include the biggest coal users, such as China, India, and the U.S.

If world leaders don't act now to speed up our response to climate change, our biggest task will be learning how to live with coming disasters, such as more intense storms, flooding and higher temperatures. And we'll have to deal with the negative side effects, such as famine, mass migration and social upheaval. 

It's an expensive, but essential challenge, Woollacott said.

"There are no free lunches out there for us, and there will always be tradeoffs," Woollacott said. "Yes, it will cost us, and yes, absolutely, resoundingly, it'll be worth it to have a climate that continues to support us as it has for known history."

Woollacott is part of RTI's new Center for Climate Solutions, which advises governments and private companies. Researchers are studying the social, economic, environmental and health effects of climate change. And they're trying to find ways to slow global warming — or adapt to climate change, according to last month's announcement of the center.  

A version of this originally appeared Nov. 4, 2021, in the weekly WFAE climate newsletter.