Oct 15, 2013

An unbiased economic scorecard shows that global warming provides a net 1.3% GDP gain so far

...It will come as a big surprise that climate change from 1900 to 2025 has mostly been a net benefit, rising to increase welfare about 1.5% of GDP per year. Why? Because global warming has mixed effects and for moderate warming, the benefits prevail. The increased level of CO₂ has boosted agriculture because it works as a fertilizer and makes up the biggest positive impact at 0.8% of GDP. Likewise, moderate warming avoids more cold deaths than it incurs extra heat deaths. It also reduces the demand for heating more than increases the costs of cooling, totaling about 0.4%. On the other hand, warming increases water stress at about 0.2% and negatively impact ecosystems like wetlands at about 0.1%. Storm impacts are very small, as the total storm damages (including naturally caused storms) are about 0.2%.

..But what about areas like biodiversity, global warming and air pollution?
The net impact on biodiversity has been declining over the 20th century, but will likely improve slightly in the 21st. Losses in the 20th century were on the order of 1% of GDP, whereas from 2000-2050 there will be a small 0.25% GDP benefit, because of reduced conversion of forests and better usage of agriculture.

Air pollution is not what you think. It is by far the biggest environmental problem in the world. And its impact has been declining for past 110 years. This is because most air pollution deaths are caused by indoor pollution from cooking and heating with dirty fuels. Over the 20th century, 260 million died from indoor air pollution in the Third World – about twice the toll in all the century's wars. 

Overall, in 1900, air pollution cost 23% of global GDP. Today it has fallen to 6% and by 2050, mainly because of much less indoor pollution, it will reach 4% by 2050.

The overall score is hard to deny. The realist assessment is that the optimists have it.

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