How much will it cost to save the planet?

Can you picture 50 trillion dollars? It’s quite a lot. Fifty trillion dollar bills stacked one on top of each other would easily reach into space. Laid out, they would cover nearly 200,000 square miles, almost the size of France. The likes of Elon Musk and Jeff Bezos, the richest people on earth, enjoy a personal wealth of around $200 billion each – a figure that is smaller than one per cent of $50 trillion.

Considered in the abstract like this, $50tn is an incomprehensible sum of money. But what if you were told it was also the total price of tackling climate change globally and saving the planet for ever?

Estimates as to this figure vary in reality, depending on various factors, and the true picture of climate economics is more complex than a single headline figure, because different interventions can lead to positive and negative economic impacts in the medium and longer term. But attempts to put a price on saving the planet can prove useful for climate activists and economists alike – not least because they overwhelmingly demonstrate that the costs of inaction would be far greater.

A source of debate

While various organisations and groups have worked to stamp a price on tackling climate change, they have largely failed to reach consensus for a number of reasons. Not all agree on what is meant in the first place by saving the planet:  is it a case of avoiding the worst effects of climate change or of turning around our fortunes completely? And even fewer agree on the specific actions required and how they should be prioritised.

Morgan Stanley, most commonly associated with the $50tn figure which came from its 2019 report Decarbonization: the Race to Zero Emissions, identifies specific areas of  investment and attaches price-tags to each: renewables; electric vehicles; carbon capture; hydrogen production and biofuels. But others include in their analyses the protection of biodiversity, improved infrastructure to protect against extreme weather, the introduction of carbon taxes on business, and any number of other actions. Estimates therefore vary between around $300bn and $100tn, and tend to refer to investment needed over the next two decades rather than a single static figure.

Where scientists agree broadly is on the three pillars of action needed to halt global warming and reach net zero globally: mitigation, referring to actions that will slow the rate of global warming; adaptation, or how to live with the effects of global warming that are irreversible or already baked in to the future; and resilience – the transition to a new, sustainable way of life. 

$50 trillion in the global economy 

Clearly, these are enormous sums of money – particularly if you happen to be stacking dollar bills on top of each other or laying them out like tiles. But in the context of global government spending, they are a little easier to quantify. Globally, governments are estimated to have spent $12tn supporting people through Covid-19, while a recent study suggested that the US had spent $6.4tn on wars abroad since 9/11. Globally, conflict and violence cost the world around $14tn each year when military spending, security and losses are accounted for.

Crucially, world leaders committed to spending to tackle climate change in 2015, when the Paris Agreement was signed. “We need to make good now on the handshake that we had in Paris of $100bn,” UN Deputy Secretary-General Amina J Mohammed said at this month’s global TED Countdown Summit in Edinburgh. “And that was promised annually. Rich countries, let me say here and now: we’re looking at you for the unfinished business.”

Paying dividends

Central to any discussion of climate spending is the fact that these actions and investments don’t exist as standalone items of expenditure, rather, they pay for things which can go on to have their own economic benefits by creating jobs or income.

“The findings of [our] research suggest that the traditional assumption that action on climate change is net-costly is false,” says Dr Fergus Green, author of an influential 2015 paper on the economic benefits of tackling climate change in which he argues that “the majority of the global emissions reductions needed to decarbonise the global economy can be achieved in ways that are nationally net-beneficial to countries, even leaving aside the ‘climate benefits’.”

At a global level, the UN estimates that doubling renewable energy capacity by 2030 could in fact save the world between $1.2tn and $4.2tn each year by reducing pollution. Moreover, closer to home, the UK National Audit Office has found that every £1 spent on preparing for flooding saves £9 in damage avoided.

Analysis by the Global Commission on Economy and Climate has even found that the transition to low carbon and sustainable development could result in a $26tn boost to the economy and 65 million new jobs by 2030, more than paying for the initial costs of putting such actions in place.

The cost of inaction

And while huge, estimates such as the $50tn figure still pale in comparison when compared to the costs of not acting to tackle climate change. In August this year, the UN’s Intergovernmental Panel on Climate Change highlighted the brutal and often irreversible effects of human activity and warned of increasingly extreme temperatures, flooding, wildfires and drought in a report described by UN Secretary-General António Guterres as “a code red for humanity”. 

Alongside these catastrophic impacts on humanity itself, the costs associated with the status quo are also difficult to conceive of. Morgan Stanley estimates that in just three years, from 2016 to 2018, the type of climate-related natural disasters that are expected to worsen in the coming years cost the world $650bn. Analysis by the Swiss Re Institute suggests unfettered climate change could wipe up to 18 per cent of GDP from the global economy by 2050.

When world leaders meet in Glasgow for the UN’s COP26 talks, there will be much back-and-forth on their countries’ responsibilities, targets, actions and contributions. For campaigners and scientists, though, what is not up for debate is the urgency with which climate change needs to be tackled and invested in seriously. Fifty trillion dollars might be a huge sum, but to protect the future of humanity it seems a small price to pay.