Cost of stopping global warming and the cost of not stopping it

This article was first published on Coventry Climate Action Network’s website.

How much should the world’s nations be spending every year in order to hold global average temperature rise to less than 2°C?

The 2°C target is an international climate policy goal to limit global warming to less than 2°C above pre-industrial levels (1850–1900). It’s a key part of the 2015 Paris Agreement, which aims to keep the average rise in global temperatures below this target. However, as of December 2023, the Earth is already about 1.2°C (2.2°F) warmer than it was before the Industrial Revolution, and some say the 2°C target is ambitious given our current trajectory. In November 2023, the world briefly surpassed the 2°C limit for the first time, though this was only temporary.

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So how much will it cost?

The Conference of the Parties COP21 in 2015 agreed to set a global goal for the amount the world should be spending. It is called the New Collective Quantified Goal (NCQG) on Climate Finance. The parties agreed the NCQG should not be less than $100 billion per year, taking into account the needs of developing countries and will be set in the context of transparency and meaningful mitigation actions.

The amount is expected to be agreed upon at COP29 in in Baku in November 2024. Amounts were in the June 2024 mid-year UN climate talks in Bonn, Germany. The Arab Group has put forward a figure of $1.1 trillion a year from 2025 to 2029. (A trillion is a thousand billion.)

However, as reported on the CovCAN website in 2021, estimates by the International Energy Agency and BloombergNEF of the global cost of reaching net-zero emissions by 2050, will be somewhere around $4 trillion per year.

But this is probably an underestimate. A calculation published on the CovCAN website in 2021 was that, in order just to replace all fossil fuels with clean electricity, the world needs to spend about $105 trillion. To achieve this by 2050 would cost $3.5 billion per year, and this would still not produce net-zero emissions.

And further, as reported by CovCAN in 2020, a report published in Environmental Research Letters predicted the cost just for the damage done by sea level rise as between $14 trillion and $27 trillion per year if global mean temperature rise is not held below 2°C.

Thus an annual investment of $1.1 trillion falls short of what is needed to stop global warming. And failing to stop global warming of more than 2°C would be far, far higher.