Climate change is already costing the world billions. Last year, Hurricane Ida caused an estimated $75 billion in damages and killed dozens of people. Floods in Germany that swept away homes cost more than $40 billion; floods in China caused $17 billion in damages. In the Western U.S., wildfires caused $10 billion in damages, and widespread drought cost another $8.9 billion. And the list goes on.
In a new report, Deloitte estimates the economic impact of letting climate change continue unchecked, including the cost of an increasing number of disasters along with failing crops, land lost to sea level rise, lost productivity because of extreme heat, and increased disease, among other impacts. By 2070, if emissions continue on the current path, the model estimates that it will cost the global economy $178 trillion. But if nations can decarbonize by the middle of the century, we could add $43 trillion in value instead.
Most economic models don’t take the full costs of climate inaction into account. “Because the climate has changed, our economics, too, need to change,” the report authors wrote. (In the 1990s and early 2000s, oil companies also hired economic consultants to write reports that inflated the projected cost of climate action, and ignored the benefits.) Decarbonization will cost more in the initial stages, the Deloitte report says, and continuing disasters will add to strain on the economy. But reaching net zero will ultimately create much more value. The economic turning point could happen as soon as this decade in Asia—the region that also faces the largest long-term costs if emissions don’t drop—but closer to the middle of the century in the United States.
Much of the technology that we need for the transition already exists but needs to be deployed faster, with investments from both governments and businesses to enable structural change. “To achieve this comparatively better future will require an industrial revolution over the next 50 years,” the authors wrote. “And the time to act is now. With global emissions continuing to rise over the past two decades, we have squandered the chance to decarbonize at our leisure.”