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Arctic Warming Could Cost Upwards of $60 Trillion

The worldwide impacts of a rapidly warming Arctic could cost the global economy an estimated $60 trillion, nearly equal to the entire global economy in 2012, according to a new study. That report, published Wednesday in the journal Nature, is the first to analyze the potential economic costs of rapid Arctic warming.

The study bluntly warns that the tendency for policymakers to focus solely on the benefits of an increasingly open Arctic Ocean — like increased mining, oil and gas drilling, and maritime shipping — misses the longer-term “economic time bomb.” The Arctic region, the study said, is “pivotal” to the functioning of the global climate system, and disrupting it will not come cheaply.

The Coast Guard ice breaker Healy seen here clearing the path for another ship.
Credit: U.S. Coast Guard.

“Estimates are that the economic benefits of Arctic shipping and oil exploration will be four orders of magnitude less than the additional costs analysed here,” co-author Peter Wadhams, a professor of ocean physics at the University of Cambridge, told Climate Central.

The Arctic has been warming twice as fast as lower latitudes, and the region plays a key role in regulating the Earth’s climate system, since the bright white land and sea ice reflects an enormous amount of incoming solar energy back to space, and the Arctic Ocean helps drive global ocean currents. As sea ice and land ice melt, they expose darker surfaces below, and those surfaces absorb more solar energy, leading to warming. This process, through which Arctic warming feeds upon itself and accelerates, is known as Arctic amplification.

Last year saw the most extensive loss of Arctic sea ice ever recorded in the 34-year satellite history. When the melt season finally ended in late September, the Arctic Ocean managed to hold onto less than half of the average sea ice extent seen during the 1979-to-2000 period. So far this summer, sea ice has remained above the level of the 2012 record melt, but not by much. The past six years have had the six smallest sea ice extents since 1979, and sea ice volume has also declined precipitously.

The new study focuses on one potential impact of Arctic warming in particular — the release of methane gas, which is a potent global warming agent, from frozen deposits known as “methane hydrates,” located beneath the East Siberian Sea. Studies have projected that as the ocean temperatures warm in response to the loss of sea ice, some of the methane will be released into the atmosphere. Methane is a more potent, but shorter-acting, global warming gas when compared to carbon dioxide (CO2).

For the Nature study, researchers calculated the average global economic consequences of the release of 50 gigatonnes of methane over the course of one decade — from 2015 to 2025 — from thawing undersea permafrost. They found that the costs would vary between $10 trillion to $220 trillion, depending on the emissions reductions that are put in place during the same period for other greenhouse gases, such as CO2.

The mean estimate of $60 trillion is close to the estimated value of the entire global economy in 2012, which was $70 trillion, the study said.

The economic model used in the study, which is an updated version of the model used in the 2006 Stern Review on the Economics of Climate Change, found that the costs of Arctic warming overwhelmingly outweigh the potential benefits.

To arrive at their economic impact estimates, the researchers ran the integrated assessment model 10,000 times under two different emissions scenarios, out to the year 2200.

The study found that the “methane pulse” would add an extra 15 percent of the average total projected cost of climate change impacts, which are about $400 trillion in total.

Chris Hope, a coauthor and policy modeler at Judge Business School at the University of Cambridge, told Climate Central that while the model results have a large range of uncertainty, the methodology has been through a rigorous peer review process.

“We’re careful all the while to talk about the mean of results,” he said.

Hope said that regardless of whether the actual economic impacts of Arctic warming wind up being on the low end or high end of the scale, the bottom line is that focusing only on the benefits of Arctic warming, as policymakers have tended to do, is problematic at best.

“People have so far concentrated on these very small benefits, in global terms, and have rather ignored what these global impacts are likely to be,” he said.

For example, at a meeting on Arctic sea ice melt in Washington last week, top U.S. scientific and military officials discussed how to manage the increased activity in the region, but the economic, and even environmental downsides to Arctic warming were not raised.

The various shipping routes that may become viable as Arctic sea ice melts, transforming the Arctic Ocean into a seasonally ice-covered ocean.
Click image to enlarge. Credit: Arctic Portal.

One cautionary note is that the study only examines the consequences of a release of a significant amount of methane from the East Siberian Sea off the northern coast of Russia. That means that when other aspects of Arctic warming are factored in, such as ocean acidification and the possibility that Arctic warming is altering weather patterns in the northern hemisphere that could bring more extreme events, the costs would climb even further. Also, the likelihood of a large methane pulse is a hotly debated issue in the scientific community. For this study, the researchers relied on methane-release estimates produced from a separate study.

"It's neither a pessimistic nor an optimistic scenario but a reasoned estimate provided by the person who has studied this seabed region most intensively," Wadhams said of the methane release scenario. 

The authors argue that policymakers are discussing Arctic issues in forums that are too parochial, such as the Arctic Council, which is a cooperative body comprised of the eight Arctic nations and several observer countries

“The Arctic is driving so much of our climate system and will really have economic impacts . . . globally,” said co-author Gail Whiteman, a professor at Erasmus University in Rotterdam. “It’s not just an issue for Arctic countries to say 'yeah, who owns those shipping rights or who owns those oil and gas drilling rights.' ”

The study recommends that the World Economic Forum, whose annual gathering in Davos, Switzerland, draws a who’s who list of world leaders and business executives, put economic modeling of Arctic climate change into its Arctic agenda, which it recently launched. 

Related Content
Accelerated Warming Driving Arctic into New, Volatile State
In Rapidly Changing Arctic, U.S. Playing Game of Catch-Up
Melting Permafrost Will Boost Temps, But Not Quickly 
Greenland Ice Melt Near Critical ‘Tipping Point’ 
The Story Behind Record Ice Loss in Greenland 
Arctic Warming is Altering Weather Patterns, Study Shows 
It’s Official: Arctic Sea Ice Shatters Record Low


By Noel Darlow
on July 24th, 2013

Could you do a follow up on what other climate scientists think (eg Gavin Schmidt) to put this into context? There appears to be significant doubt that a methane release on this scale and in such a short space of time is possible.

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By Andrew
on July 24th, 2013

Noel - the story reflects the feedback of folks such as Gavin, who pointed out the uncertainties involved with projecting such a methane pulse, when it states “For this study, the researchers relied on methane-release estimates produced from a separate study.

“It’s neither a pessimistic nor an optimistic scenario but a reasoned estimate provided by the person who has studied this seabed region most intensively,” Wadhams said of the methane release scenario.”

We have done other reporting on this issue already, and will continue to follow it closely. Thanks for the suggestion!

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By Eric Peterson (Front Royal, VA 22630)
on July 25th, 2013

A good rebuttal is here:

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By Neven (Austria)
on July 25th, 2013

Re-posted on the Arctic Sea Ice blog. Thanks, Andrew.

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By Lewis Cleverdon
on July 27th, 2013

Professor Wadhams’ rebuttal of the feeble hatchet piece of his recent paper in the Wash.Post is worth reading:

“In support of your skepticism about methane emissions you quote authors who wrote before the enormous retreat of summer Arctic sea ice and its oceanographic effects became so evident. The mechanism which is causing the observed mass of rising methane plumes in the East Siberian Sea is itself unprecedented and hence it is not surprising that various climate scientists, none of them Arctic specialists, failed to spot it. What is actually happening is that the summer sea ice now retreats so far, and for so long each summer, that there is a substantial ice-free season over the Siberian shelf, sufficient for solar irradiance to warm the surface water by a significant amount – up to 7C according to satellite data.

That warming extends the 50 m or so to the seabed because we are dealing with only a polar surface water layer here (over the shelves the Arctic Ocean structure is one-layer rather than three layers) and the surface warming is mixed down by wave-induced mixing because the extensive open water permits large fetches. So long as some ice persisted on the shelf, the water mass was held to about 0C in summer because any further heat content in the water column was used for melting the ice underside. But once the ice disappears, as it has done, the temperature of the water can rise significantly, and the heat content reaching the seabed can melt the frozen sediments at a rate that was never before possible. The authors who so confidently dismiss the idea of extensive methane release are simply not aware of the new mechanism that is causing it.!”

My only gripe with the paper is that it might have generated far more public interest had it included, alongside the economic impact of a rapid CH4 release, the scale of additional GHG output measured in CO2e (carbon dioxide equivalent) as the multiple of major polluter-nations’ present outputs.

For example, taking the slow end of the range of Prof. Wadhams’ prognosis of 50Gts CH4 over 50 years, 1.0Gt CH4 /yr would equate to about 105Gts CO2e /yr on the critical 20-year time horizon. This equates to a four-fold increase on anthro-CO2 outputs, equal to roughly 10 new China’s-worth of CO2 each year, or roughly 18 new America’s-worth of CO2 each year.

And that’s from the slow end of the prognosis.

Unless and until some new scientific finding refutes Prof.Wadhams’ prognosis, I suggest that no serious activist or scientist should view mitigation by Emissions Control alone as being remotely credible for resolving our predicament.



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By Eric Peterson (Front Royal, VA 22630)
on July 27th, 2013

Rebuttal to the rebuttal I posted above:

At that link Peter Wadhams defends his Nature commentary that Andrew linked at the top.

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By Bryan Bates (Burlington Ont Canada L7M1N4)
on July 28th, 2013

Why not listen to me I have come up with something that has never come up before. Did you know that 50 to 75% of the air pollution contains carbon dioxide and if you safely store it. If you understand what pollution is you will understand. What I mean is that pollution like CO2 can be stored in steel and diamonds. Diamonds are make from carbon that is in the air too. But you must beat the heat and pressure to make diamonds I can beat this thanks to the big oil companies. What I do is use an electrical current to store pollution in to everyday things.

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