Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

In the halting, measured language we’ve come to expect from his impromptu public remarks, President Obama posed a core dilemma of climate change yesterday at his first post-election press conference. Explaining the possible repercussions of failing to act now, he said, climate change “is going to have an impact and a cost down the road, if we don't do something about it."

Whether to pay for an energy transformation now, or take our chances with climate impacts and costs "down the road," is a key, polarizing economic question within climate change policy. Another way of framing it is this: What's the future worth to you? 

People alive today and people alive 100 years from now have the same moral value (it seems to me) and different economic value. That sets up all sorts of trickiness. As economist Richard Tol has put it, placing an even greater economic value on the future than economists do "may be morally preferable but is clearly out of line with common practice." 

Money tends to lose value over time. A dollar today is worth much more than in 2112. We tend to believe that the economy will grow, we'll all be richer later, the value of a dollar will gradually fall -- and with it the cost of adapting to a new climate. It’ll be cheaper to adapt to changes in the future than anticipate them and pay for them with more valuable dollars now. 

Part of it is also just human psychology. We live in the present, not the future, so why don’t I just take that dollar now, thank you. As J. Wellington Wimpy -- yup, Popeye's friend -- expresses the problem, "I'd gladly pay you Tuesday for a hamburger today." When he’s staring at a lightly charred, grease-oozing meat patty wedged into a bun, Tuesday sounds as agreeable as anything because it’s practically synonymous with “never.” 

The problem with the live-now-pay-later approach is that there are many things dollars can't buy when they're gone, such as Arctic ice caps, biodiversity, pre-industrial ocean chemistry or historic sea levels. Now, don’t get me wrong. Human communities are adaptable. That’s how we walked out of Africa and colonized the world. But there’s an important disconnect here that warrants attention, too. People try to adapt once an event has occurred; beginning to adapt before events occur, even predictable events, is not always our strong suit. 

I bet the policy professionals and scientists who ponder climate change adaptation spend little if any time with investors and traders whose livelihoods rise or fall on the spread between company estimates and earnings. There’s a yawning chasm between how much tolerance companies and investors have for blips in performance, which is to say not much, and the large-scale threats to life and property in years and decades ahead, which as far as anybody knows could be considerable. I’d gladly pay you Tuesday for a hamburger today.

The world has warmed about 0.8 degrees Celsius since 1900. To the extent that scientists can characterize a world 2 degrees C hotter, 3 degrees C hotter or 4 degrees C hotter, it's not one that's likely to have water, ice, coasts and soils in places we like them. "There is now little to no chance of maintaining the rise in global mean surface temperature at below 2 degrees C, despite repeated high-level statements to the contrary," Kevin Anderson, of the University of Manchester, and Alice Bows, of the University of East Anglia, wrote in a 2011 issue of Philosophical Transactions of the Royal Society: A devoted to research about extreme climate change. They also note that scientists think climate impacts expected from a 2 degree C rise will be worse than they thought just a few years ago. International policymakers have generally accepted two degrees as a rough estimate of the upper bounds of acceptable climate change: It might not be. 

Obama’s comments drew much attention yesterday, and if (if) the White House and legislators are able to agree on a climate policy, it would change the conversation nationally and globally. A tax on carbon pollution is receiving renewed attention, having been dismissed by climate policy advocates as too weak in 2009-2010 when Democrats tried and failed to move a cap-and-trade bill through the Senate. 

U.S. federal policy is important, but the attention it receives often obscures productive experiments going on in California, which held its first auction of carbon pollution permits yesterday; in the European Union, where the bloc's seven-year-old emissions trading system is undergoing a mid-course correction; in South Korea, which will test a carbon-trading system next year; in Australia, Mexico, Canada, China and elsewhere. Policy experiments such as these are intriguing to watch unfold, particularly where they might achieve lasting emissions reductions. Also, it's worth pointing out the U.S. has seen dramatic increases in solar power efficiency and decreases in coal use despite the absence of a national carbon policy.

Federal officials can monitor these initiatives as they progress. As they do, they might also mind the gap between climate scenarios projected from our business-as-usual energy economy and from safer pathways. It would be a shame to look back and conclude that the United States was too J. Wellington Wimpy when it turns out to have mattered most. 

Visit for the latest from Bloomberg News about energy, natural resources and global business.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.