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Market News

 February 27, 2009
The High Cost of Doing Nothing

 GLOBE-Net - Do Nothing is often one of the options policy makers are given when decisions of great moment are required. But when it comes to climate change, doing nothing is definitely not an option.

This fact was underscored with the release of a report that shows if Western states don’t substantially reduce greenhouse gas emissions, they could face billions of dollars in health care and other related costs by 2020.

Economists for the University of Oregon’s Climate Leadership Initiative’s Program on Climate Economics estimate Washington, Oregon and New Mexico will probably face associated annual costs of $3.8 billion, $3.3 billion and $3.2 billion by 2020, respectively, if they don’t rein in greenhouse gas emissions, logging and other factors that drive climate change, according to a series of reports released last week.

That works out to $1,250 per household in Washington, $1,930 per household in Oregon and $3,430 per household in New Mexico.

"Associated costs" include money spent on inefficient energy use and health-related expenses as a result of hotter temperatures and greater likelihood of certain natural disasters (such as wildfires, floods and droughts) from extreme weather. The Western states will probably see more severe storms, prolonged heat waves, seasonal droughts and floods, and wildfires in certain areas. Hotter weather would lead to greater costs to treat heat-related ailments.

The Program on Climate Economics is led by 19 academic and private economists from Washington, Oregon, New Mexico and other Western states. More information on the Program on Climate Economics is available here.