Along these lines, Bjorn Lomborg calculates that the only way to sustain economic growth while cutting CO2 is to lower the cost of low-carbon energies to the point that they are cheaper than fossil fuels. Roger Pielke Jr. meanwhile proposes that we need to achieve vastly greater efficiency in our use of carbon and non-carbon fuels alike. Both foresee the need for a great deal of innovation before we get to thriving, low-carbon economies, ensuring that in the short term emissions cuts will be economically painful. To the environmentally concerned, this is a trade-off that must be accepted, though to the economically-minded (including most governments and their voters), it is a bitter pill.
The other approach to climate change economics is summed up in the idea of the "Green Economy." It suggests we can take a leap of faith in low-carbon fuels now, without waiting for more innovation--that decarbonizing will bring its own economic rewards. At the very least, it claims that decarbonizing will lead to relative economic well-being, compared with continuing upon the current road of maximizing fossil fuel use. But this form of economics which includes environmental costs retains an "alternative" status.
Lately, however, a more mainstream position has been emerging that a decarbonising world economy would be economically healthier than one with a business-as-usual approach to fossil fuels. This position can be seen in the World Bank's advocacy of climate change mitigation. A succinct new version of this position can be found in an article released the other day by ClimateProgress,* which looked at leaked models from the still-to-be-released Fifth Assessment Report of the Intergovernmental Panel on Climate Change.
These models contrast economic futures with maximum CO2 emissions cuts against futures with minimum cuts. The models show the former to be healthier than the latter, insofar as "climate change means more droughts and altered rain patterns...greater food insecurity...constricted freshwater supplies and heat waves...[and] more strain on the infrastructure of cities and communities."
Not being an economist, I asked some other tweeters what they thought of the IPCC's new models contrasting non-decarbonising and decarbonising global economic scenarios. They gave me permission to reproduce their tweets here, and I'm doing so to open up further conversation about these matters:
Cal Abel @cal_abel I'm not convinced… 80% of energy infrastructure is fossil fuel. Improvement comes from lower cost alternatives.
Luis B. Aramburu @luisbaram If we cut them via efficiency, certainly a plus; if by moving to low carbon energy, a minus.
Andrew Leach @andrew_leach Qualitatively, the results make perfect sense. Do too little or too much, and output suffers.
Andrew Leach @andrew_leach Basically it's the classic externalities result: even if it doesn't show up in prices, there's still a cost.
Robert Joshi @RobertJoshi Makes sense if assuming efficient policy. Interested in how adaptation is valued as a complement/alternative.
In sum, concern remains that decarbonisation will damage economic growth if technologies and cultures for achieving energy efficiency lag. However if economic projections can realistically include contrasting costs to GDPs of *not* making emissions cuts--by factoring in longer-term stresses on growth of unmitigated climate change and the costs of adaptation--they might help us square our environmental and economic interests even within the technological and cultural status quo.
*Note: Scott Luft pointed out to me that the ClimateProgress article by Jeff Spross was subject to some post-hoc revision after being criticized for some of its original inferences. The discussion that led to moderation of the article's claims is here.**
**Turns out the problems in the comparison may be more severe than I first recognized. As Roger Pielke Jr. pointed out, the problem identified by David Stern is laid out more fully here. However, even if the modelling done by Jeff Spross might be problematic, it strikes me as still valuable to compare decarbonised future economies with all-out carbonised ones in ways that include potential feedback from climate change.