The regrets of procrastination in climate policy

Anthropogenic carbon dioxide (CO₂) emissions are projected to impose economic costs due to the associated climate change impacts. Climate change impacts can be reduced by abating CO₂ emissions. What would be an economically optimal investment in abating CO₂ emissions? Economic models typically suggest that reducing CO₂ emissions by roughly ten to twenty per cent relative to business-as-usual would be an economically optimal strategy. The currently implemented CO₂ abatement of a few per cent falls short of this benchmark. Hence, the global community may be procrastinating in implementing an economically optimal strategy.

Here we use a simple economic model to estimate the regrets of this procrastination—the economic costs due to the suboptimal strategy choice. The regrets of procrastination can range from billions to trillions of US dollars. The regrets increase with increasing procrastination period and with decreasing limits on global mean temperature increase. Extended procrastination may close the window of opportunity to avoid crossing temperature limits interpreted by some as 'dangerous anthropogenic interference with the climate system' in the sense of Article 2 of the United Nations Framework Convention on Global Climate Change.