Climate change needs to be addressed but the Democrats' plan is alarmist and not going to save the planet. We need to weigh costs and benefits of climate action. Over the past few decades, climate change has been cast in ever more apocalyptic terms. A new global survey shows that almost half the world’s population and about 4 of 10 Americans believe global warming will likely lead to the extinction of the human race.

Incessantly claiming the end of the world is near is simply unbridled alarmism and untethered to the actual research presented by the UN Climate Panel. However, such scare scenarios are ideal for politicians; they can promise to save the world, and they can leave the substantial bill to future election cycles.

Democrats' action plan for climate change

In this context, House Democrats have joined a long list of prominent global politicians across the last decades who promise to fix global warming, outlined in a 538 page Congressional Action Plan. Among many other proposals, it promises no new gasoline cars by 2035, ending fossil fuels in the power sector by 2040, and reducing the net emissions from the U.S. to zero by 2050. Appropriately, speaker Nancy Pelosi capped her presentation by promising the plan would be “saving the planet.”

It might seem odd to be discussing climate change in the midst of a global pandemic. However, the Democrats point out that climate, not corona or the recession, is the “essential crisis of our time” as it threatens devastating health and economic consequences.

Yes, climate change is a real challenge that we need to tackle smartly. But suggesting it is an “existential threat” to human existence, as Joe Biden frequently claims, causes us to panic and make poor decisions. Instead, we need to weigh costs and benefits of climate action.

When the Democrats claim that climate change is worsening the impacts of extreme storms, droughts, and flooding, they are mostly wrong. Peer-reviewed research clearly shows that neither landfalling hurricanes nor strong landfalling hurricanes in the U.S. have become more frequent since 1900. The 2017 National Climate Assessment even states that “drought has decreased over much of the continental United States.” It also concludes that flooding, which has increased in some places and decreased elsewhere, cannot be connecte d to climate change.

While costs from disasters are increasing, this is overwhelmingly because more people with more valuables live closer to harm’s way. For instance, the coastal population in Florida has increased 67-fold since 1900, with each family living in more expensive houses. A hurricane hitting Florida today will, therefore, create much more financial damage than a similar hurricane 120 years ago. Thus, helping future generations avoid costly hurricane damage is about better building codes, restricting siting in vulnerable areas, and providing residents with more information.

This doesn’t mean there aren’t real benefits to cutting emissions, but they are dramatically lower than what the Democrats suggest. The UN Climate Panel shows that the total negative impact of climate change in half a century will be equivalent to a reduction in annual incomes of between 0.2 and 2%. As it expects the average person in 50 years to be 363% richer than today, that means with global warming the average person will grow 356% richer. That is a problem, but not the end of the world.

The costs of cutting emissions

Unfortunately and glaringly, the Democratic plan contains no cost estimates, despite its intention to fundamentally restructure the growth engine of the U.S. Only one nation — New Zealand — has been bold enough to request an independent cost estimate of cutting emissions to zero by 2050. The New Zealand Institute of Economic Research found that the optimistic cost would reduce GDP by a whopping 16% each year by 2050. Translated to the projected U.S. GDP in 2050, this would imply a cost of at least $5 trillion in today’s money. Not just once, but every year. That is more than the entire pre-Covid-19 annual federal spending of $4.5 trillion.

Needless to say, spending 16% or more to avoid part of a 2% problem is a bad deal. But Democrats are not alone. Many countries have made spectacular promises to cut emissions and failed. The UN, in a surprisingly honest review, says that despite all the good intentions from the Obama administration and other countries, actual global emissions look similar to a hypothetical world which had made no climate policies since 2005.

And cutting emissions is hard. The corona epidemic has created a dramatic recession, yet it will likely reduce U.S. 2020 emissions by just 7 to 11%. To get to zero would require ten or more lock-downs every year. This will be phenomenally expensive and politically impossible.

T hat is why Democrats — and all of us — should focus more on solutions that will actually be effective and realistic. Currently, cutting emissions is costly and involves subsidizing inefficient solar, wind, and electric cars. Rich countries can afford a little, though none can afford to dramatically switch.

But if we invest much more into green research and development, we can innovate the price of future green energy below fossil fuels. Then everyone will switch.

Claiming climate change is our biggest challenge is a false alarm. Proposing unrealistic and extremely expensive policies is unhelpful. The Democrats are correct to emphasize we need climate policies, but the policies must be smart.

Bjorn Lomborg is president of the Copenhagen Consensus and visiting fellow at the Hoover Institution, Stanford University. His new book is "False Alarm — How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet."