II. Costs from Delaying Policy Action
Delaying action on climate change can increase economic costs in two ways. First, if the delayed policy is no more stringent, it will miss the climate target of the original, non-delayed policy, resulting in atmospheric GHG concentrations that are permanently higher, thereby increasing the economic damages from climate change. Second, suppose a delayed policy alternatively strove to achieve the original climate target; if so, it would require a more stringent path to achieve that target. But this delayed, more stringent policy typically will result in additional mitigation costs by requiring more rapid adjustment later. In reality, delay might result in a mix of these two types of costs. The estimates of the costs of delay in this section draw on large bodies of research on these two types of costs. We first examine the economic damages from higher temperatures, then turn to the increased mitigation costs arising from delay.
Our focus here is on targets that limit GHG concentrations, both because this is what most of the “delay” literature considers and because concentration limits have been the focus of other assessments. These concentration targets are typically expressed as concentrations of CO2-equivalent (CO2e) GHGs, so they incorporate not just CO2 concentrations but also methane and other GHGs. The CO2e targets translate roughly into ranges of temperature changes as estimated by climate models and into the cumulative GHG emissions budgets discussed in some other climate literature. More stringent concentration targets decrease the odds that global average temperature exceeds 2°C above preindustrial levels by 2100. According to the IPCC WG III AR5 (2014), meeting a concentration target of 450 parts per million (ppm) CO2e makes it “likely” (probability between 66 and 100 percent) that the temperature increase will be at most 2°C, relative to preindustrial levels, whereas stabilizing at a concentration level of 550 ppm CO2e makes it “more unlikely than likely” (less than a 50 percent probability) that the temperature increase by 2100 will be limited to 2°C (IPCC WG III AR5 2014).[1]
Increasing Damages if Delay Means Missing Climate Targets
If delay means that a climate target slips, then the ultimate GHG concentrations, temperatures, and other changes in global climate would be greater than without the delay.[2]
A growing body of work examines the costs that climate change imposes on specific aspects of economic activity. The IPCC WG II AR5 (2014) surveys this growing literature and summarizes the impacts of projected climate change by sector. Impacts include decreased agricultural production; coastal flooding, erosion, and submergence; increases in heat-related illness and other stresses due to extreme weather events; reduction in water availability and quality;
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- ↑ IPCC WG III AR5 (2014, ch. 6) provides a further refinement of these probabilities, associating a concentration target of 450 ppm of CO2e with an approximate 70-85 percent probability of maintaining temperature change below 2°C, and a concentration level of 550 CO2e with an approximate 30-45 percent probability of maintaining temperature change below 2°C.
- ↑ For information on the impacts of climate change at various levels of warming see Climate Stabilization Targets: Emissions, Concentrations, and Impacts over Decades to Millennia (NRC 2011).
