Costs of climate change: solving the paradox?

Our lowest cost route to an energy transition was spelled out in December-2020 (note below), looking across 90 prior research reports and 270 data-files. It is fully possible to reach ‘net zero’ by 2050. The economic costs ratchet up to $3trn per annum.

However, based on the latest disclosures from the IPCC, we estimate that the unmitigated costs of climate change are only $1.5trn per year. So paradoxically, the energy transition appears to cost 2x more than climate change itself (note below).

Thank you for participating in our survey below. We are very grateful for your opinions and intuitions on resolving this paradox…


Transitioning the world to 'net zero' is a crucial objective that should be pursued by decision-makers.
Economics matter to the energy transition. Lower-cost transition pathways are preferable to higher-cost transition pathways.
The costs of transitioning the energy system to 'net zero' by 2050 will likely reach $3trn per year. However, the ultimate costs of unmitigated climate change are likely only $1.5trn per year. If these numbers are correct, then they would challenge the rationale for targeting 'net zero' by 2050?
If achieving 'net zero' by 2050 is economically irrational, then this is another reason to fear many new energy technologies may be becoming bubbles?
Targeting an energy transition is still economically rational, because the costs of climate change will most likely be materially higher than the $1.5trn per annum that Thunder Said Energy has estimated.
Targeting an energy transition is still economically rational, because new technologies are likely to deflate the costs of achieving 'net zero' far below the $3trn per annum that Thunder Said Energy has estimated.
Targeting an energy transition is still economically rational, if this lowers the chances of catastrophic tail risks. Even though these tail risks are unlikely, they could have materially larger impacts than Thunder Said Energy's base case cost estimate of $1.5trn per annum.
Targeting an energy transition is still economically rational, because the $3trn per year costs of energy transition will mostly be borne in wealthier countries (which can more readily afford them), while the $1.5trn per year costs of climate change would mostly be borne in less wealthy countries (which can less readily afford them).
If the costs of achieving the Paris Climate goals, limiting warming to 2C, and reaching 'net zero' by 2050 outweigh the benefits, then this suggests the need to re-optimize climate targets. There could be alternative timings, or alternative ceilings on global warming (e.g., 2.5C, 3C, 3.5C ?) where the costs do outweigh the benefits. Better-optimized climate targets should therefore be explored.
It is morally 'wrong' to change the world's climate. So it does not matter whether the energy transition is economically rational.
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