The debate around climate change and clean energy has focused largely on the cost of taking action. The Environmental Protection Agency (EPA) recently released its analysis of a bill introduced by Sens. Kerry (D-MA) and Lieberman (I-CT). It found the cost to average consumers to be fairly negligible. But as the Economist points out, the analysis misses a critical element - the cost of inaction.
More and more we are seeing the real time impacts of climate change. Companies are already being encouraged to adopt relevant adaptation policies they will need in order to cope with an unpredictable and shifting climate in the coming decades. It's absolutely critical that while we debate various policy options moving forward we never lose sight of the fact that the cost of inaction will far outweigh the cost of action.
As many of you will know I'm a big fan of placing a price on carbon. Right now we get to emit greenhouse gases (GHGs) for free when we know their effect on the environment comes with a cost. Ezra Klein recently posted an excellent piece which focused on pricing externalities. In this case it was specific to oil but you only need to replace that term with CO2 or GHGs and you've got a strong argument for taking into account the full cost of carbon.
Without doing something now, we place ourselves at much greater risk to weather extremes. We're already committed to a certain amount of exposure, but why push the envelope further?
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