Economic Cases for Climate Change Mitigation

[Michael Hardner]

The purpose of this thread is to initiate discussions around how we would assess frameworks for mitigating climate change. 

There are other threads that discuss whether climate change is happening, causes, etc. That is not this thread. 

Nor is the intention to make the economic case itself. Instead, I would like a discussion on how we would collectively assess an approach: what are the thresholds for return on investment, what are the trade-offs, what is the timing for change. 

Here's a starting point, an assessment by the the Boston Consulting Group:

https://www.bcg.com/press/12march2025-economic-case-climate-investment

There is a strong case for investing in climate mitigation and adaptation based on the severe economic consequences of failure alone. Allowing global warming to reach 3°C by 2100 could reduce cumulative economic output by 15% to 34%. Alternatively, investing 1% to 2% in mitigation and adaptation would limit warming to 2°C, reducing economic damages to 2% to 4%. This net cost of inaction is equivalent to 11% to 27% of cumulative GDP—equivalent to three times global health care spending, or eight times the amount needed to lift the world above the global poverty line by 2100.

 

These are among the findings of the Boston Consulting Group (BCG), Cambridge Judge Business School, and the University of Cambridge’s climaTraces Lab report

[Michael Hardner]

There's nothing in this assessment, that I quoted, that is panicked or provides a moral plea. 

It's a strict economic assessment, looking at costs and benefits. 

For those of you who decry environmental movements for hysterical And unrealistic disaster cheddar, my question is: is this kind of sober and numbers-based analysis more what you're looking for? 

 

Again, This is a meta discussion.  I'm asking what kind of discussion would bring more people into engagement.

[Barquentine]

Sound like you're looking for experts to weigh in. I am definitely not an expert on the science or economics of climate change. (Hell, I'm not an expert on anything.)

But the climate trend is obvious, the effects will be huge, and mitigation is absolutely required.

I wonder what the insurance sector will do about it. They wield huge power to affect change.

And even though China is still using huge amounts of coal, the investments they're making in renewables should tell us something.

The economic discussion will yield the most results. Just going to take a while.

[Legato]

Alternatively, investing 1% to 2% in mitigation and adaptation would limit warming to 2°C, reducing economic damages to 2% to 4%. 

One might ask on what is involved in the mitigation and adaptation.

[Michael Hardner]

11 minutes ago, Barquentine said:

Sound like you're looking for experts to weigh in. I am definitely not an expert on the science or economics of climate change. (Hell, I'm not an expert on anything.)

But the climate trend is obvious, the effects will be huge, and mitigation is absolutely required.

I wonder what the insurance sector will do about it. They wield huge power to affect change.

And even though China is still using huge amounts of coal, the investments they're making in renewables should tell us something.

The economic discussion will yield the most results. Just going to take a while.

Not really experts, more like engaged members of the public explaining in detail what they would accept in terms of framework discussions.

11 minutes ago, Legato said:

Alternatively, investing 1% to 2% in mitigation and adaptation would limit warming to 2°C, reducing economic damages to 2% to 4%. 

One might ask on what is involved in the mitigation and adaptation.

Good question, but the high-level summary says we spend 1 to 2 percent of GDP on this, which is about $500 billion to $1 trillion for the G7.  

[Barquentine]

5 minutes ago, Michael Hardner said:

$500 billion to $1 trillion for the G7.

Doesn't sound like much for the G7.

[Michael Hardner]

19 minutes ago, Barquentine said:

Doesn't sound like much for the G7.

Like it says above 1%-2%.

 

Now if you tell someone we're spending HUNDREDS OF BILLIONS... they will likely need to take a chair and have a seat...

[Legato]

1 hour ago, Michael Hardner said:

Not really experts, more like engaged members of the public explaining in detail what they would accept in terms of framework discussions.

Good question, but the high-level summary says we spend 1 to 2 percent of GDP on this, which is about $500 billion to $1 trillion for the G7.  

"This" being what? I would like to see some positive movement from a technical standpoint.

Solar, wind, hydro, geothermal, and bioenergy are all we have (except nuclear).

These sources are heavily subsidised already and are only a half baked solution.

[TreeBeard]

2 hours ago, Michael Hardner said:

Like it says above 1%-2%.

 

Now if you tell someone we're spending HUNDREDS OF BILLIONS... they will likely need to take a chair and have a seat...

Really?  That is the wealth of one single person.   So it doesn’t really seem like a group of the wealthiest nations on earth should find it a problem to raise that amount.
 

Taxing billionaires an extra 25% would probably cover the costs.  Even a modest tax on their wealth growth would increase the government coffers by billions annually.  
 

ChatGPT ran the numbers on what would happen if billionaires paid taxes at the same rate middle-class families do — around 15%-22%.

Using the ProPublica data, if those top 25 billionaires had been taxed at a 20% rate on their wealth growth, they would have paid around $80 billion instead of $13.6 billion.

“Extrapolate that across approximately 1,000 billionaires?” the AI asked. “You’re talking hundreds of billions in added revenue annually.”

https://finance.yahoo.com/news/asked-chatgpt-happen-billionaires-paid-170130161.html

Edited August 26, 2025 by TreeBeard

[Michael Hardner]

1 hour ago, Legato said:

"This" being what? I would like to see some positive movement from a technical standpoint.

Solar, wind, hydro, geothermal, and bioenergy are all we have (except nuclear).

These sources are heavily subsidised already and are only a half baked solution.

I should have said "if" we spent that much.  No idea what the real number is.

This thread is more about how we would approach the economic discussion at a meta level.  Maybe looking at the progress made by those sources is relevant here, though.  Do you have anything ?  

[Legato]

1 hour ago, Michael Hardner said:

I should have said "if" we spent that much.  No idea what the real number is.

This thread is more about how we would approach the economic discussion at a meta level.  Maybe looking at the progress made by those sources is relevant here, though.  Do you have anything ?  

A snippet here.....

However, these subsidy amounts will not meet climate goals. It seems that the higher the subsidies for and dependency upon wind and solar become, the more outlays from the government and consumers are necessary to reach “net zero.” Rising electric rates from wind and solar power and government expenditures also lead to stifled economic growth, which thwarts economic investment, now seen throughout much of Europe.

https://www.instituteforenergyresearch.org/renewable/renewable-energy-received-record-subsidies-in-2024/

[Michael Hardner]

26 minutes ago, Legato said:

A snippet here.....

However, these subsidy amounts will not meet climate goals. It seems that the higher the subsidies for and dependency upon wind and solar become, the more outlays from the government and consumers are necessary to reach “net zero.” Rising electric rates from wind and solar power and government expenditures also lead to stifled economic growth, which thwarts economic investment, now seen throughout much of Europe.

https://www.instituteforenergyresearch.org/renewable/renewable-energy-received-record-subsidies-in-2024/

Of course nobody is 'independent' but it should be said that this IFR group is said to be funded by petroleum industry. 

That said, the US outlay is far beyond what the Boston Group indicates would be necessary, taken as a % of G7 Gross Domestic Product average.  I would submit that this paper is a good example of what I'm looking for in this thread: a list of criteria that we can agree upon, to determine the timing/priority/resourcing for Climate Change mitigation.  They are looking at wind and solar and not seeing a business case.

Examining the cases is for another thread.  So far we have a few examples of what we need to look at for the discussion.

[herbie]

BC Hydro just gave the go ahead for 10 new wind and solar projects totalling 5 Gigawatts to feed into the grid.

Shortly after turning on the final generator in the Site C dam, they also announced the site is capable of producing more power than originally thought.

[Michael Hardner]

29 minutes ago, herbie said:

BC Hydro just gave the go ahead for 10 new wind and solar projects totalling 5 Gigawatts to feed into the grid.

Shortly after turning on the final generator in the Site C dam, they also announced the site is capable of producing more power than originally thought.

Yeah... but that's not what this thread is about.

Do you have a macro-view summary of where we are with wind/solar in terms of costs and output, over years ?  From an auditor-type source ?

[LinkSoul60]

Quick look at Canada with the more recent investments here and elsewhere;

https://climateinstitute.ca/investing-in-clean-power-can-lead-to-big-pay-offs-for-canadas-economy/

Today, almost 60 per cent of the world’s 2,000 largest companies by annual revenue have their own net-zero targets, with 39 per cent of global market capitalization made up of companies who have science-based targets, as of 2023.

And while this trend has faced some recent headwinds, corporate climate targets in Canada have remained resilient. At an international level, global capital has continued to target clean projects and zero-emission goods and services, with total investments in 2024 exceeding $2 trillion for the first time, despite a slow-down in the rate of growth. Similarly, U.S. clean energy investments hit a record high in the latest quarter of 2024.

Ontario has leveraged its electricity systems low emissions-intensity to become an electric vehicle (EV) manufacturing powerhouse, receiving $44 billion in new investment in EV and battery plants alone. In 2024, Honda announced it will be investing $15 billion in the province to develop an integrated EV battery value chain. Volkswagen is building a $7 billion EV manufacturing plant that will be the largest manufacturing plant in Canada, generating around $200 billion in value. 

Quebec has also leveraged its ability to supply clean, reliable hydropower to attract investment from major players. In 2022, when announcing the selection of the province for a new battery material plant, the Vice President of GM Canada stated that “Quebec was chosen for this facility because of several advantages… low greenhouse gas (GHG), low-cost electricity is really important” .

The province’s hydro-based electricity mix is also very attractive to companies in the artificial intelligence space, who require significant quantities of round-the-clock clean power. In 2023, Microsoft invested $500 million USD in four new data centers in Quebec to expand their cloud computing and AI infrastructure capabilities.

[herbie]

2 hours ago, Michael Hardner said:

Yeah... but that's not what this thread is about.

It kind of is.

If you look into ir they are all new companies, many formed with 1xy Nation partnerships that will create jobs and spinoffs that weren't there before.

Climate action does create more jobs than by maintaining the status quo while scaling back workers and automating processes.

[Michael Hardner]

3 hours ago, herbie said:

1. It kind of is.

2. Climate action does create more jobs than by maintaining the status quo while scaling back workers and automating processes.

1. It's about... how do we make the economic case to justify the investment or not?  What do we consider.  It's not about making the case, on its own.  I want to find out what opponents would consider to address their concerns.

2. The question is how to assess the value of this investment using objective terms.

[herbie]

52 minutes ago, Michael Hardner said:

how do we make the economic case to justify the investment or not?  What do we consider.

I thought that was what I was pointing out. I am trying to support the case for investment.

I'm sure there will be enough tired excuses as to why not.

[Michael Hardner]

6 minutes ago, herbie said:

I thought that was what I was pointing out. I am trying to support the case for investment.

I'm sure there will be enough tired excuses as to why not.

Sure but "jobs" isn't really a reason.  The value provided is, but many aren't convinced of this value.

[herbie]

Ok, but in order to have jobs, someone has to make money creating them. Thet's the big $$$
The companies profit from the energy they sell, the owners and shareholders that are the investors.

I'm not promoting alternative energy so much for jobs, I believe we should invest because we have to. None of this status quo, no piddling about exploring nuclear, definitely no back pedalling and loosening environmetal standards so ploughboys like Scott Moe can fire up new coal plants.

[Michael Hardner]

9 hours ago, herbie said:

  I believe we should invest because we have to.  

If we have to, then we have to approach the skeptics on a political landscape.  This is what I am discussing.

[Nationalist]

Found it...

I find the article mostly reasonable. I think the "soft spot" in it, is the leap it takes to say...

"There is a strong case for investing in climate mitigation and adaptation based on the severe economic consequences of failure alone."

Question: Is it wise to assume the worst case scenario based on rather questionable reporting? We are talking about mitigation i believe, and mitigation has real cost.

However...should this reportedly "doable" investment happen WHILE dropping the war on fossil fuels (taxes and stifling regulations) then I would be all in on the investment into finding a reasonable and reliable "clean" energy source which realistically replace fossil fuels in a measured transition so as to not adversely affect the general cost and level of living.

Climate guys and girls...

The main problem those you call "climate deniers" have, is the cost. Take your Gawd-Damn boots off our throats and wallets...and you'll find the resistance vanishing. Thus providing a truly unified effort.

In other words...think instead of panicking. 

Edited August 27, 2025 by Nationalist

[LinkSoul60]

12 hours ago, Michael Hardner said:

It's about... how do we make the economic case to justify the investment or not?  What do we consider.

I understand what you're asking and why, but struggle with 'justify the investment'...  

First, I'd comment the same as Herbie, 'we need to invest because we have to'. 

The world gets it, and the fact is we are and will continue to invest in cleaner energy here and globally. The cost of not investing is far greater to future generations than the financial cost to this and upcoming generations.  It's like saying we can lessen the price of cars if we removed electronic and structural safety features, or lessen the cost of home construction if they didn't have to meet building code.

Not directly on subject title so apologies... but can't get my head around 'case to justify'.  Leaving a better world behind for when we're not here is my justification.

[Michael Hardner]

1 hour ago, LinkSoul60 said:

 

First, I'd comment the same as Herbie, 'we need to invest because we have to'. 

 .

This speaks to your subjective values, which I share. But the purpose Here is to find objective measures that could convince others.

[LinkSoul60]

1 hour ago, Nationalist said:

The main problem those you call "climate deniers" have, is the cost. Take your Gawd-Damn boots off our throats and wallets...and you'll find the resistance vanishing. Thus providing a truly unified effort.

Your argument of cost is with the companies investing in clean energy, not the 'climate deniers'.  Corporate investments are ongoing and all towards cleaner and/or renewable energy. That's not going to stop.  Look no further than the Mag 7 and their recent investments in energy to support data centres, which you're paying for in some fashion when you pay your gas or electricity bills and/or buy their products or services.

https://www.renewableinstitute.org/google-launches-20-billion-renewable-energy-initiative-to-fuel-ai-advancements/

Google have revealed a partnership with renewable energy developer Intersect Power and the investment fund TPG Rise Climate to generate sufficient renewable energy to power multiple gigawatt-scale data centres. The overall investment in renewable energy is estimated at $20 billion, with Intersect already funding the first project.