Paul Krugman: Saving the Planet 'Might Be Free'

Economist and New York Times columnist Paul Krugman says he’s been reading “two new reports on the economics of fighting climate change” that prove saving the planet could be “cheaper and easier than almost anyone imagines.”

Here’s a sampling of the evidence that suggests to him that the “economics of climate protection look even better now than they did a few years ago”:

On one side, there has been dramatic progress in renewable energy technology, with the costs of solar power, in particular, plunging, down by half just since 2010. Renewables have their limitations — basically, the sun doesn’t always shine, and the wind doesn’t always blow — but if you think that an economy getting a lot of its power from wind farms and solar panels is a hippie fantasy, you’re the one out of touch with reality.

On the other side, it turns out that putting a price on carbon would have large “co-benefits” — positive effects over and above the reduction in climate risks — and that these benefits would come fairly quickly. The most important of these co-benefits, according to the I.M.F. paper, would involve public health: burning coal causes many respiratory ailments, which drive up medical costs and reduce productivity.

Of course, the wrench in the machine of Krugman’s last point is the utter lack of evidence that leaders in government and business run their cost-benefit analyses with entire societies in mind. Rather, they limit their concerns to their locales, social classes and enterprises — and sometimes, as in cases of control fraud, to themselves alone.