From deciphering past changes to predicting future changes, scientists have made huge strides in understanding the biology and physics of climate change.
As our understanding of the science of climate physics continues to expand, a gap is beginning to emerge: What social and economic impacts will climate change and efforts to reduce greenhouse gas emissions have?
The true cost of carbon emissions
It is estimated that every ton of CO2 emitted today costs society and the economy a sum of money known as the social cost of carbon (SCC). It can also be seen as a monetary benefit to society, as it avoids the costs associated with repairing the impact of releasing an extra ton of carbon into the atmosphere.
SCC has been incorporated into existing regulations as a fundamental policy measure. However, current estimates need to be addressed if we are to make effective policy decisions in the face of climate change.
The current SCC formula ignores key details. For example, how do economists calculate the "non-market" costs of climate-related disasters such as wars, disease outbreaks, and forest loss? To what extent is climate change hindering economic development in different regions? Can farmers adjust their crop choices and planting schedules to mitigate lost income?
Because of its policy implications, there is an urgent need to accurately calculate the social cost of carbon. Furthermore, this is an area where we should be able to make rapid advances in knowledge.
What are the most effective ways to reduce emissions?
Once scientists agree on a true price for carbon, they can use a wide range of policy levers to reduce emissions. Industry restrictions and subsidies on renewable energy are popular policy options around the world. However, they may not be as effective as carbon permits or carbon pricing in reducing emissions.
Until we understand the pros and cons of different carbon pricing strategies, governments are largely blind when it comes to climate action. Providing a compelling economic case for one approach over the other can help bring political support for carbon pricing policies closer to their true benefits and costs.
What contributions have developing countries made to the world?
Although developing countries account for an increasing share of global greenhouse gas emissions, the vast majority of existing research on climate economics focuses on developed countries. The economies of poorer countries may be more vulnerable to the effects of climate change due to the different policy frameworks under which they operate.
Further research is needed to understand the climate policy options available to developing country governments and how these options affect the likelihood of different impacts in a given country.
Lack of funding is the main obstacle.
Both economists and scientists face challenging research questions, but economics receives significantly less research funding, resulting in a significantly smaller workforce and slower progress.
Scientists around the world use the same climate models and compare their results to predict Earth's climate. The business world is just starting to collaborate in this way, and I'm sure the results will be very beneficial. There are reasons to invest in more research to better understand the social and economic impacts of climate change. Investing more money in the social sciences can make a big difference.