Monday, December 18, 2017

Climate change: Costs and benefits of ending oil

On Friday, SSC released the information it had provided to political parties during the coalition negotiations phase. Among this was advice to the Green Party on the cost of ending all future coal mining, offshore oil drilling, and fracking. Using a present-value approach - basicly, all the money we will ever get from those industries, discounted for time, and not including benefits such as stopping spills and environmental destruction - put the cost of ending oil at $15 billion. Note that that's not an actual price tag, but a cost in terms of "money we will never get". Ending coal was priced at $441 million, which in present-value terms is next to nothing.

$15 billion sounds like a lot, and it is. But as noted above, it doesn't consider benefits, only costs (which largely fall on foreign oil companis, not kiwis). So what are those benefits? Avoiding sea-level rise, for a start:

The most recent national assessment found nearly 170,000 buildings sat within 3m of the mean high water spring, exposing them not just to sea level rise, but also storm-tide and wave flooding that could reach 1-2m in exposed places.

If all of those buildings were lost, they would cost $52 billion to replace.

About 68,000 buildings are below the 1m mark, carrying a replacement value of about $19b.

The report didn't include other assets or infrastructure on the damage bill, other than identifying the kilometres of road and rail exposed, and the number of airports.

So, the benefits of ending fossil fuel burning outweigh the costs by a margin of at least three to one. Even if the first metre of sea-level rise (which will drown South Dunedin, New Brighton, Eastbourne and Petone) is already baked in and unavoidable, its still a two to one benefit to cost ratio. Which seems like a complete no-brainer.

Two thirds of kiwis live in areas prone to sea-level rise. Ending fossil fuel use isn't some green quack - its an essential survival step. And while ending it here will only be a small amount, and won't protect us from foreign CO2, the journey is made of single steps, and we can't expect others to do what we won't do ourselves.