All of that wealth comes, ultimately, from the planet, and the climate. Specifically, it has come from a stable climate. William Nordhaus points out in his 2013 book “The Climate Casino” that “the last 7,000 years have been the most stable climatic period in more than 100,000 years.” The last 7,000 years have also seen the rise of civilization and the creation of that $500 trillion in wealth. This is not a coincidence.
Nordhaus won the Nobel Prize this week, in an announcement that coincided with the release of a hugely important UN Intergovernmental Panel on Climate Change report on what will happen to the world when it gets 1.5°C, or 2.7°F, warmer than preindustrial levels.
The report puts the cost of a 1.5°C increase at $54 trillion, in today’s money.
You think $54 trillion is a lot? That number comes from research that also says that a 2.0°C increase will cause $69 trillion of damage, and a 3.7°C increase will cause a stunning $551 trillion in damage.
$551 trillion is more than all the wealth currently existing in the world, which gives an indication of just how much richer humanity could become if we don’t first destroy our planet.
We’ll be environmentally richer, too. While it’s hard to put a dollar value on that, the value of environmental benefits has been rising steadily over time and will continue to do so. Already, we regret environmental destruction in the past and would happily give up a small fraction of our current wealth to undo it.
Source: The cost of climate change