The Cost of Inaction in the Fight Against Climate Crisis: 178 Trillion Dollars

For centuries, fossil fuels were seen as the main source of growth and wealth. However, every day more economists state that the widespread use of fossil fuels such as coal, oil, and natural gas is pulling down economic growth and living standards. According to the report prepared by Deloitte and published at the World Economic Forum, if the world continues its habits regarding fossil fuels and energy consumption, the cost of this situation will be 178 trillion dollars in the next fifty years. For comparison, it should be noted that there is a total wealth of 500 trillion dollars globally today. On the other hand, a series of steps to be taken to reduce global greenhouse gas emissions to zero by 2050 can contribute 43 trillion dollars to the global economy within the same time frame. As stated in the report, if the world warms by three degrees compared to pre-industrial periods, economic activities all over the world may be disrupted. Therefore, economic activities may slow down significantly as countries will have to invest in climate crisis-related damages instead of strengthening their innovation capacities or infrastructures. In this context, climate crisis-related events such as changing weather conditions, rising sea levels, and the spread of diseases can lead to a serious decrease in welfare levels due to their effects on labor productivity, land use, agricultural yield, infrastructure, health, and tourism. According to Pradeep Philip, one of the authors of the report, many economic analyses do not take into account the changing conditions caused by the climate crisis because they assume that general trends will be growth-oriented. The report indicates that awareness is increasing regarding the distorted perception of the cost of climate protection in economic forecasts and analyses. Since the 1990s, companies, especially oil companies, that want to avoid legal regulations have been funneling money to various economists or institutions to conduct studies that focus only on the costs of climate policies. These studies, which aim to make policymakers and the public feel the burden of the costs of measures to be taken against the climate crisis, ignore the damage that an increasingly warming planet will bring and the role of improved human welfare due to reduced emissions in alleviating this burden. As mentioned in the report, if the effects of changing climate are not included in the calculated models, weak decisions, inefficient risk management strategies, and insufficient actions will jeopardize the fight against the climate crisis. Despite this, these analyses, which do not take into account the economic, social, and environmental costs that the climate crisis will bring, serve as the basic argument and decision framework for many politicians. According to Claire Ibrahim, one of the authors of the report, the report refutes the belief that the urge to remain inactive with the acceptance of the current situation will not cause any cost. Thus, the basis of excuses for not taking action against the climate crisis, referring to the economy, is shaken. If these excuses and views continue to dominate, many countries in Asia-Pacific, Southeast Asia, and the Pacific Islands, including China, Japan, India, and Australia, will have to bear a huge burden of 96 trillion dollars by 2070. Moreover, the gross domestic product of this region will be 16 trillion dollars less than in a scenario where the climate crisis and related damages do not…