Will global warming eventually cost the world’s economy $12 trillion? I’ve got no clue. I mean, even the specialists who’ve studied the economic impacts of climate change have no real idea. The latest figure is just their best guess.

But this much is clear: no matter whether this estimate is on the mark, thinking about the cost of “business as usual”—i.e., the cost of doing nothing about global warming—is exactly the right framework for thinking about the issue.

I can’t count the times I’ve read a claim to this effect: “Even if climate change is really happening, it’ll cost a heck of a lot of money to do something about it.” And often, the analysis stops right there.

That’s just dopey.

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  • A few years back, we painted our house. It was expensive, sure. But not painting it would have been even more expensive—we would have saved on paint and supplies in the short term, but we would have eventually paid much, much more to repair water damage. And pretending that there’s a third choice—like, neither painting nor suffering water damage—would have been magical thinking at best, and delusional at worst.

    Just so, fighting global warming may well be expensive (though I anticipate that the early stages will actually make the economy more resilient—which is a story for another day). But letting global warming run amok will be expensive too—probably more expensive than doing nothing. Tallying up the cost of fighting global warming, without a serious and sober look at the cost of doing nothing, is the sort of basic error that ought to get you laughed out of Accounting 101.

    Which is why studies that look at the cost of global warming’s “business as usual” scenarios are so important. They make it much easier to see the full consequences of climate policy choices—and much harder for global warming skeptics to pretend that all the costs of cimate change wind up on one side of the ledger.