Spend Now, Save Later

Discussions about investing in the future are increasingly popular with the passage of the economic stimulus package. Much of those discussions have focused on investments in green technologies. The argument goes that investments made now by the United States to combat global warming can save money later.

That fact, that investing in solving global warming now can save money, extends beyond the United States. It is true globally as well. In December, the international community will have an opportunity to discuss the costs associated with climate change this year. Because of the financial crisis, governments will be both more likely and more able to tackle the future costs of greenhouse gas emissions.

Regardless of if the world decides to aggressively tackle climate change or not, future energy expenditures will be high. The International Energy Agency (IEA) estimates that a global investment of $22 trillion into energy supply and infrastructure will be necessary within the next 30 years to support a growing world population. If these investments flow into "traditional" technologies, greenhouse gas emissions would increase by 50%. But, if these investments are converted to “green” technologies, emissions would decrease by 50%.

On the other hand, if spending is not allocated towards “green” technologies and global warming is allowed to continue unabated, the costs of dealing with climate change will grow exponentially. Estimates by the Institute for Sustainable Development anticipate that climate change could cost 8-20% of global GNP.

Future costs of climate change will be a discussion topic at the fifteenth Conference of the Parties (COP15). With the expiration of the Kyoto Protocol coming in 2012, expectations are high for this year’s climate conference in Copenhagen. In December, representatives from 192 nations will assemble in Denmark in the hope of creating a more stringent climate agreement.

Many international leaders are arguing that the financial crisis has proven the importance of addressing looming problems. This most recent meltdown illustrates that waiting to address an ongoing problem is much more expensive than tackling it right away. The U.S. has plans to spend over $1 trillion dealing with its economic woes. Hopefully, that lesson will translate to dealing with the climate change issue sooner rather than later.