Climate Change Will Blow Up the Deficit

One point that remains little-understood about climate change is that it isn’t a traditional environmental issue, where we preserve some bit of nature for the sake of its beauty (with possible tourism side benefits). Even from the most soulless possible economist position, the case for action is ironclad. Climate change is the mother of all unpriced externalities, which Hurricane Sandy (unquestionably strengthened by climate change) made especially clear. Burning all this carbon is raising the sea level, making storms more powerful, creating persistent drought (which still afflicts nearly 60 percent of the lower 48), and much else, all of which is terrifically expensive.

The estimated costs for Hurricane Sandy are on the order of $50 billion. That money is stolen. Coal and oil companies, anyone who sells carbon or burns carbon and profits by it is creating a mess for which they do not have to pay. Even Friedrich von Hayek supported government regulation in that kind of situation. If I build an iPad factory, and as a byproduct of the manufacturing process it creates mountains of dog poop which I dump in my neighbor’s yard, the free market position is clearly that the state must force me to internalize the cost of that poop. It’s a simple point, but one that isn’t widely understood, especially by the national press.

Yesterday David Dayen made the related point that the same logic applies to the federal budget and the national debt:

Spending on sustainable programs like Social Security matters much less to that budget picture in 2040 than the impact of catastrophic climate change. Hurricane Sandy is projected to cost $50 billion. Imagine one or more of those types of weather events every year, in the midst of rising oceans that will only make the impact greater. Imagine the cost of resource wars as water becomes less potable and drought conditions magnify, destroying crops and making the basic human act of feeding ourselves less secure. The costs of unmitigated climate change are almost incalculable.

Exactly. Few things could be more expensive than having to replace our nation’s entire stock of capital goods, or having to build a seawall around every coastal city, or having all our farmers go bankrupt because the US heartland becomes a windswept desert.

There are of course many other, much better arguments for action on climate change, like for example that billions of people will die if we don’t do something. The point, though, is even if we adopt the morally bankrupt and quite frankly idiotic focus on the national debt über alles of the Pete Peterson/B-S commission crowd, the case for action remains ironclad.

@ryanlcooper

Ryan Cooper

Ryan Cooper, a contributing editor of the Washington Monthly, is currently the Washington correspondent for The Week.