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About Climate-Change’s Economic Cost

Here’s a letter to WTOP Radio in Washington, DC:

News Director:

During today’s 2:00pm hour, one of your reporters spoke with Marketwatch’s Paul Brandus about Sen. Joe Manchin’s refusal to support all of Pres. Biden’s environmental agenda. Obviously critical of Sen. Manchin’s concern that Mr. Biden’s programs are too costly, Mr. Brandus suggested that the admittedly high cost of the president’s programs are nevertheless lower than are the economic costs of the climate change that would result if the president’s programs aren’t approved.

Color me skeptical. As noted by NYU professor Steven Koonin – former provost and professor of physics at Caltech, who served also as Energy Department Undersecretary for Science in the Obama administration – the U.N. itself finds that climate-change’s likely negative economic impact on world income by the year 2100 will be no more than three percent. Prof. Koonin then put this U.N. forecast into perspective:

An impact of 3 percent in 2100 – some eighty years from now – translates into a decrease in the annual [economic] growth rate by an average of 3 percent divided by 80, or about 0.04 percent per year. The IPCC [Intergovernmental Panel on Climate Change] scenarios assume an average annual growth rate of about 2 percent through 2100; the climate impact would then be a 0.04 percent decrease in that 2 percent growth rate, for a resulting growth rate of 1.96 percent. In other words, the UN report says that the economic impact of human-induced climate change is negligible, at most a bump in the road.*

It seems as though Sen. Manchin and many others in Congress who worry about the high cost of Mr. Biden’s environmental agenda are on solid ground after all.

If your goal is to report on the climate accurately rather than ideologically, I recommend that you assign to all of your reporters the book from which the above quotation is drawn, namely, Prof. Koonin’s 2021 book, Unsettled? What Climate Science Tells Us, What It Doesn’t, and Why It Matters.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

* Steven E. Koonin, Unsettled? What Climate Science Tells Us, What It Doesn’t, and Why It Matters. (Dallas: BenBella Books, Inc., 2021), pages 178-179.