Despite the retraction of a recent study, economists still agree that climate change is expensive and dangerous.
A study that projected extremely large damages due to climate change has attracted significant and renewed attention recently after the scientific journal Nature retracted it. But the commotion over a single paper risks undermining a persistent consensus among economists: Climate change is harmful and expensive, and climate action is an urgent necessity.
The retraction attracted buzz both because the climate damages the study’s authors originally projected were so large—an outlier among other projections—and because a group of central banks and financial supervisors incorporated the projections into assessments of financial risk due to climate change. Economists who reviewed the study found errors in the underlying data that significantly influenced the results, which motivated the retraction.
An overwhelming majority of economists agree that the damages of climate change will be large, and the costs of climate inaction significantly exceed the costs of action. We know that economists agreed on the urgency of climate action in a survey of hundreds of economists that we conducted. We also analyzed the large body of climate damage estimates available—using a method known as meta-analysis—to identify central estimates of these damages. If we exclude the retracted paper from our most recent meta-analysis, these large damages persist: Climate change leads to reductions in gross domestic product (GDP) of 7 percent with 3 degrees Celsius of warming. The retracted paper was 1 of 38 studies included in the meta-analysis. A 7 percent reduction is roughly the equivalent of wiping the combined GDP of Brazil, Germany, and Italy off the map.
Furthermore, these already large projections in our meta-analysis are central estimates. Catastrophic damages as large or larger than those in the retracted study are possible—these damages are just less likely. The central estimates are also inherently conservative because economists do not account for all the impacts of climate change. For example, one common method of projecting climate damages does not account for mortality due to climate change or sea level rise, and another common method does not account for mortality due to wildfire smoke or the effects of climate change on economic growth.
Ideally, projections of climate damages would inform actions taken by government, institutions, and businesses. We should applaud banks and others that incorporate projections of climate damages into risk assessments and policymaking, but a broader pool of projections should be referenced instead of a single study. The pool provides a functional consensus about the relative urgency of action. Again, this consensus is that we need to do more, faster, to address climate change.
Opponents of climate action may try to capitalize on Nature’s retraction with arguments that it is proof of a divided—and therefore unreliable—scientific community or that projections of climate damages are unreliable altogether. Usually, opponents cite studies that project climate damages smaller than, for example, our central estimates. A U.S. Department of Energy draft report about climate impacts that we and many others rebutted is a case study in this kind of cherry-picking.
Now, opponents may point to the retracted high estimate to suggest that the venture of projecting climate damages is bunk.
The retraction is instead evidence that the publication process is working. A study with an extremely large estimate received additional scrutiny from experts in the field, prompting retraction and corrections. The authors have so far responded with grace and composure, which is especially admirable given the spotlight they were thrust into, and, most importantly, they undertook to revise and resubmit their paper to the journal. After they do, the revised paper will undergo a new cycle of peer review.
Science is a collective venture. Imagine a single health study that found a surprisingly large benefit to consuming a particular food. Such studies often garner headlines but should be considered against a broader background of health studies from a wide range of experts. Doctors presumably take this background into account when giving advice to patients.
Similarly, the retracted study about climate damages is just one in a pool of peer-reviewed studies, and the pool is growing every year. This context is crucial. The consensus among economists is that climate change will be—and is already—dangerous and expensive, warranting immediate action. One paper, regardless of its mistakes, does not change that.
