2018 is the beginning of a New Age of Extremism, especially related to the climate. All the climates: political, economic, environmental. This article is about the most literal meaning of the word “climate”, and a bit on economics related to the extreme climate. Let’s start things off with a good old XKCD comic strip reviewing over 20,000 years of human history related to the climate. It’s really important to directly include this one in its entirety instead of adding a link to it because of its relevance to our discussion.

source: https://imgs.xkcd.com/comics/earth_temperature_timeline.png

There are two things that are really amazing to me about this timeline: 1) we managed to cross the distance between Russia and Sarah Palin’s house in Alaska 5000 years before we invented farming. 2) A temperature difference of just 4 degrees warmer raised the oceans to a level that wiped out what could have been its own continent: Siberingia! It also made the difference between a completely frozen-over New York City and the relatively livable and thriving metropolis it is today.

It also showcases the amazing pace of our economic and industrial growth. It’s not until we get to the end of the comic strip do we start to feel worried about how big of a difference that 4 degrees really made. In our mind, we often assume that growth is linear — consistent and steady. In reality, a lot of recent growth has been exponential. It’s also created exponentially growing problems, like climate change.

As the intensity of extreme weather events in the last two years has shown, even minimal warming of our planet is causing weather patterns to permanently change. Warmer fronts act as fuel for powerful hurricanes, increasing their intensity. They also lead to prolonged droughts in areas that once had enough water to survive, like the Middle East, where ancient civilizations flourished in Egypt and Mesopotamia. In addition to political unrest, lack of access to basic resources like fresh water only add to instability in various regions.

No country is immune to this trend of extreme climate events. In the very last class I took before finishing my Environmental Engineering degree, the professor showed several papers and case studies from Japan about more extreme flood events that their Storm Water drains couldn’t handle. It echoed the consulting project that my Storm Water professor was doing with Italy, bracing cities like Rome, Venice, and Milan for rising waters. The most worrying part about this trend is that the extremism of the current climate means that when there is a flood in one part of the world, there are prolonged droughts in other parts.

California is the biggest example of devastation that has occurred as a result of the prolonged drought. Perpetual dryness without any rains has made the grass very fragile, resulting in destructive blazes displacing hundreds of thousands of people, dozens of tragic deaths, and tens of thousands of people having to rebuild their lives from scratch. For the past week here in the San Francisco Bay Area and Silicon Valley, a persistently visible haze turns the sun perpetually orange and leaves an earthy smoke different from the thin grey veil of urban life, reminding us all that our whole state is on fire.

On the other side of the country in the East Coast, where many of my family live, unpredictable hurricanes and snowstorms have consistently surprised cities who were not prepared, resulting in thousands of destroyed homes and livelihoods. Just in economic terms alone, these extreme events have already cause hundreds of billions of dollars in damage per year. We need both good regulation and innovation to contain these effects.

Effective Policy and Economic Solutions

Not all efforts to create effective policy have been futile. There has been some significant level of success in cap and trade policies and zero-emission credits granted to several private companies. If it weren’t for these regulatory winds, Tesla probably wouldn’t exist today. Regulations like these around the world have allowed us to prevent the destruction of one of the largest carbon sinks in the world: The Amazon Rainforest. Its rate of deforestation has been reduced and cap-and-trade credits often come from paying landowners near the forest to keep their land undeveloped. Like many new policies, cap and trade is not widely adopted yet and still has some potential issues around abuse and corruption.

On the economic side, although the damage done by the increasing weather events has now reached a range of hundreds of billions of dollars, the cost to remove all the carbon emitted in the world currently would be about $4 trillion per year, and nobody is willing to pay for that. The good news is that we now have access to new infrastructure that allows us to reduce our reliance on fossil fuels, especially coal. More recently, solar and wind power have reached highly competitive levels where the jobs and infrastructure that may be displaced by coal will move easily to these industries. For developing economies, this is even better news because they can use the new solar panel and wind technologies from the beginning without having to rewire aging infrastructure.

Prepare for a tough ride

It is very likely that despite our efforts, we won’t be fast enough. There will be a period of several decades in the next 30 to 100 years when we remind future generations that things weren’t always this extreme. When unsuspecting hurricanes bring biblical floods to cities near water, when raging fires seem to beckon the gates of hell, we will have to remind ourselves and our loved ones that these could have been the end of times, but they won’t be. We will fight on. We will survive. During times of crises, we will unite. I hope.