The cost of keeping a global temperature rise this century to within 2 C above pre-industrial levels to meet the UN Paris Agreement has been estimated to cost the world economy $600 trillion US. But rapid changes in the Arctic could push that figure even higher.

An international report in the journal Nature Communications has come up with a price tag on climate change using computer models that take into account the cost of mitigation efforts, such as the changeover from fossil fuel technology, temperature driven impacts on the economy, effects on the ecosystem, health costs of a warmer world, damage from sea level rise and other residual effects.

While that cost seems ridiculously high to individual standards, to put it into perspective, the whole world economy is more than $80 trillion US per year, so we're talking 7.5 years of world output spread over the next 80 years. So the goal is achievable. But the study also shows that feedback loops involving the loss of snow and ice in the north are accelerating more rapidly than previously thought, which could add another $33.8 trillion US to the cost of climate change with the 2 C target, making the effort to reach those targets more challenging.

Melting permafrost releases carbon dioxide and methane into the atmosphere, which speeds up the rate of climate change. (M. Torre Jorgenson)

Arctic feedback loops accelerating climate change

It has been well established that the Arctic is warming faster than the rest of the planet because of two major feedback loops: as ice and snow disappears from the landscape, the exposed dark land and seawater absorb sunlight more easily, increasing temperatures, causing the snow to melt faster. At the same time, melting permafrost releases carbon dioxide and methane, which are greenhouse gasses, into the atmosphere, trapping heat, causing more melt.

While these effects were predicted decades ago, it turns out they are not progressing in a smooth fashion. Instead, they are nonlinear. In other words, the feedback loops are looping faster and faster, accelerating the rate of climate change beyond original predictions. More rapid warming means the efforts to reduce carbon emissions will be more costly and make it more challenging to meet the Paris Agreement targets.

As the snow and ice disappears from the Arctic landscape, it exposes dark land and seawater, which absorbs sunlight more easily, increasing the rate of climate change. (Joe Raedle/Getty Images)

The cost rises if we do nothing

Arguments are often made that the cost of reducing carbon emissions will cripple the economy, and used as excuses to delay change. We are seeing this with the U.S. pulling out of the Paris Agreement, opposition to wind energy and the continued popularity of large personal vehicles with big combustion engines. But while doing nothing might be good for the economy in the short term, the report shows that continuing with business as usual would raise global temperatures by 4 C, which would could cost a staggering $2,000 trillion US.

Villagers in Newtok, Alaska are being forced to relocate due to warming temperatures which is causing the melting of permafrost, widening of rivers and coastline and erosion to their land. (Andrew Burton/Getty Images)

In the end, it comes down to who is going to pay for the cost of climate change. It would be a wise investment in the future to re-route subsidies from dirty old technologies towards cleaner ones, and for fossil fuel industries to invest in renewables, so they become energy companies delivering a wide variety of products instead of just coal, oil or gas.

Climate change is often thought of by people as something happening in the future, or in a place far away. Most of us can still drive our gas powered vehicles and go about our lives without seeing any immediate consequences. But now, the change is hitting us in the pocket book, and since climate is a global phenomenon, everyone pays.