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Tell the climate change deniers this: it's the economics, stupid!

Published in Radical Economics, the newsletter of the New Economics Foundation, autumn 2008, issue 38.

Bjorn Lomborg is a very modern sort of climate change denier, indeed the master of the "non denial denial". Climate change is a real phenomenon, he wrote in The Guardian (15 August 2008), but we should allow it to happen because it will produce net economic benefits. "The bottom line is that benefits from global warming right now outweigh the costs", he writes. "Global warming will continue to be a net benefit until about 2070, when the damages will begin to outweigh the benefits, reaching a total damage cost equivalent to about 3.5 percent of GDP by 2300."

And even when climate change does become a net drag on the global economy, worry not. The average person will be 1,700 percent richer by 2100. So we will be able to take a little 3.5 percent knock to global GDP on the chin, without it's wiping the grin off our ever-so wealthy faces. The arguments may be facile and misleading, but we have to thank Dr Lomborg for one thing - making the 'dismal science' of economics relevant to major contemporary issues. And make no mistake, the economics of climate change represents one of the key battlegrounds on which we all need to fight for our planet's future.

Lomborg couches his arguments in the terms of cost-benefit analysis. This is all very well if we are considering, say, the costs and benefits of burning fossil fuels leading to a 20mm sea level rise, combined with stormier weather. On the benefit side the world economy has grown by some increment as a result of burning fossil fuels. On the cost side, we have to spend more sea walls and other coastal defences, while abandoning some areas of low lying coastal land to the waves. So you compare the costs and the benefits and decide accordingly.

But an approach which operates adequately when considering a 20mm sea level rise breaks down in the face of a 2m sea level rise, and collapses entirely if confronted with a 20m sea level rise. How do you put a cost on the loss of Venice and the lowland Amazon rainforest? Or to the inundation of all of Bangladesh bar the Chittagong Hills, and the entire Gangetic Plain? What kind of economic benefit could conceivably compensate for destruction of human life, culture and wellbeing on this kind of scale?

A very different kind of economics is needed to help the world to decide on its response to the looming climate crisis. It has to recognise that the cost of full scale climate catastrophe is in effect infinite, and that the only rational action is to make very sure that we do not go there at all. I am not in the slightest bit worried if my grandchildren are marginally less able to afford the latest consumer electronics in the year 2100. But I am deeply concerned at the idea that flood, drought and sea level rise will leave them hungry, homeless and struggling to survive, while forests burn, ice caps melt away and countless species are extinguished.

This is why I put together my own set of solutions in my recently published book Kyoto2 - to map out what I believe would be an effective and sufficient response to climate change, and one firmly entrenched in economic theory. Lomborg claims that it would generate only 13p in benefits for every £1 expended.

But the reverse is true. All the actions proposed, including a decisive shift to energy conservation and renewables, reversing deforestation and financing adaptation to unavoidable climate change, leading towards global carbon neutrality by 2050, would bring huge benefits to the economy, the environment and international security - so much so that even if climate change were a myth, the programme would still be worth carrying out. As Clinton campaign strategist James Carville almost said in 1992, "it's the economics, stupid". And this time, the economics are firmly on our side.

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