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Climate change, which refers to long-term changes in temperature and weather patterns, is widely recognized as one of the most urgent global challenges.
The United Nations (UN) asserts that, though climate change is a natural phenomenon, human activities have become its main driver since the 1800s. The widespread burning of fossil fuels, such as coal, oil, and gas, has accelerated warming and altered the weather worldwide.
The consensus is that switching from fossil fuels to renewable energy (RE) like solar and wind is essential to curb climate change. Even as many countries aim for net-zero emissions by 2050, global emissions must fall by half by 2030. This requires cutting coal, oil, and gas production and use by at least 30% to avoid catastrophic warming.
The costs of going green
But global leaders in the energy transition are feeling the crunch of going green.
The UK now faces some of the highest energy prices in the developed world, with energy-intensive industries struggling and household costs rising sharply. Germany, despite massive investments in solar and wind, experienced rolling blackouts and soaring energy prices. In April 2025, Spain and Portugal suffered a severe blackout caused by voltage surges and an overreliance on intermittent renewable sources without adequate backup systems.
In his paper, “Welfare in the 21st century: Increasing development, reducing inequality, the impact of climate change, and the cost of climate policies”, political scientist Bjorn Lomborg noted that implementing climate policies can be more expensive than the climate gains they achieve.
“The Paris Agreement, if fully implemented, will cost $819–$1,890 billion per year in 2030, yet will reduce emissions by just 1% of what is needed to limit average global temperature rise to 1.5°C,” he wrote, adding that the Paris Agreement delivers roughly only 11¢ in climate gains for each dollar spent.
He also stated that the long-term costs of climate policies can often outweigh their benefits. The Intergovernmental Panel on Climate Change’s (IPCC) Shared Socioeconomic Pathways (SSPs) offer two contrasting scenarios: SSP1 envisions a sustainable future with low emissions, high income, and reduced inequalities, while SSP5 foresees a fossil-fuel-driven world with rapid economic growth but high emissions.
While current climate policies align with SSP1’s sustainable approach, Lomborg argued that SSP5’s higher economic growth could lead to greater welfare. After adjusting for climate damages, SSP5 could increase the average annual income of today’s poor by $48,000 by 2050, reduce poverty by 26 million people each year, lower inequality, and prevent more than 80 million premature deaths.
(Also read: Why Economic Growth Still Depends on Reliable Power)
Energy stability as a crucial growth driver
The BBC reported that RE surpassed coal as the leading source of electricity worldwide in early 2024. The rapid expansion of solar and wind not only covered rising demand but also slightly cut reliance on coal and gas.
Yet progress has been uneven. Wealthier nations like the US and EU increased their use of fossil fuels, and coal remained the largest single source of electricity globally, a title it has held for more than half a century, according to the International Energy Agency (IEA).
When wind and hydro output dropped in Germany, the country relied on its old coal plants and imports to keep the lights on. As a result, coal generation rose by 18% and gas by nearly 14%, pushing fossil fuels to their highest share of the energy mix since 2018.
Lomborg pointed out that historically, new energy sources rarely fully replace old ones; instead, humanity adds new sources on top of existing ones. When oil was added, coal didn’t decline, and when gas increased, neither coal nor oil went away.
“Moreover, it seems dubious whether renewables will dominate the 21st century. When measuring renewables in percent of global energy, almost all energy was renewable in 1800,” he wrote. “Over the next 170 years, it declined to about 13–14%, where it remained for half a century up till today.”
According to Rappler columnist Den Somera, fossil fuels have long been the backbone of social progress, powering the basic services and infrastructure that allow people to thrive and reach their full potential.
“The fossil fuel that still continues to play a dominant role in our energy systems is coal,” he wrote. “And, whether we like it or not, coal remains to be the largest driver of society’s development the world over. This situation or condition continues up to this day.”
He added that Southeast Asia, in particular, still relies heavily on coal, which delivers affordable, reliable, and continuous electricity as a stable baseload power source. “As the ASEAN economies may continue to expand, electricity supply needs must stay stable and reliable, and prices must remain low to remain attractive to foreign investment,” he noted.
Lomborg agreed that gross domestic product (GDP) is a useful indicator of development, as higher GDP provides the resources to improve health, education, and overall well-being. GDP per person correlates closely with life expectancy, child mortality, and education levels, aligning strongly with the UN’s Human Development Index.
“There is even a strong correlation between GDP per person and national environmental performance on a wide range of parameters,” he wrote.
(Also read: Electric Cooperatives & the Energy Transition: Help or Hindrance?)
Adaptation: The frontline in climate action
The World Resources Institute (WRI) stated that climate action takes two main forms: mitigation, which reduces greenhouse gas emissions, and adaptation, which helps communities and ecosystems cope with climate impacts. However, attention and funding for the two are often imbalanced.
“Of the two, mitigation has historically received more attention and investment,” said WRI. “Meanwhile, finance for adaptation has lagged dramatically, putting communities at increasing risk from storms, floods, fires, and other climate threats.”
The Asian Development Bank (ADB) echoed the warning, noting that the Asia-Pacific region faces a massive climate adaptation financing gap—up to $431 billion needed annually from 2023 to 2030, compared with just $34 billion pledged in 2022.
For Lomborg, concerns over the future costs of climate change are often overstated because adaptation is overlooked. When communities and systems adapt, the actual economic and social impacts are far smaller than commonly projected.
He pointed to coastal flooding from sea level rise as a clear example. He noted that when presented publicly, projected future costs are often exaggerated, sometimes shown as tens of trillions of dollars per year, far higher than more realistic estimates that account for adaptation measures.
“Yet, because it ignores adaptation, this description exaggerates the problem by up to two thousand times,” Lomborg wrote. “The misleading narrative is, unfortunately, often encouraged by research that routinely neglects adaptation or treats it as a casual add-on.”
He added that these projections rarely acknowledged how even minimal adaptation could cut damages by 88% similar to other studies, and that realistic adaptation efforts would reduce the costs even further.
Balancing climate action with development
Lomborg argued that the future could be far more prosperous with less poverty, longer lives, better health and education, and wider access to energy. However, he cautioned that focusing too narrowly on climate mitigation could lead the world to choose weaker development paths.
Using the IPCC scenarios, he stated that prioritizing growth and innovation delivers better outcomes than simply aiming for the “greenest” option. “Aiming for the SSP1 is not bad. But the SSP5 world would be much better on almost all accounts,” he stressed.
He highlighted that SSP5 would provide more energy, reduce inequality, prevent millions of deaths, and make people in developing countries $48,000 richer per year by 2100, even after accounting for warming.
Although climate change is a genuine and long-term threat, Lombard said that responses must be carefully balanced. Doing nothing is not an option, yet he warned that overly aggressive or expensive climate measures could ultimately do more harm than good.
“The evidence also manifestly alerts us to the danger that we end up with too ambitious and overly costly climate policies, and a general outlook that puts the world on a growth path that will deliver dramatically less welfare, especially for the world’s poorest,” he ended.
Sources:
https://www.un.org/en/climatechange/what-is-climate-change
https://theweek.com/tech/why-britains-electricity-bills-are-some-of-the-highest-in-the-world
https://tribune.net.ph/2025/10/01/slow-but-sure-shift
https://www.ft.com/content/b155d922-288a-4bb8-b207-a9f49bb645c7
https://www.sciencedirect.com/science/article/pii/S0040162520304157
https://www.ipcc.ch/site/assets/uploads/2019/11/02_Summary-for-Policymakers_SPM.pdf
https://www.bbc.com/news/articles/cx2rz08en2po
https://www.iea.org/data-and-statistics/data-tools/monthly-electricity-statistics
https://www.wri.org/insights/strategies-achieve-climate-mitigation-adaptation-simultaneously
https://www.ft.com/content/980b037b-05ed-44f6-9bd3-8fbe5a216e10