Norwegian GDP just took a hit
The problem is that anytime someone attempts to quantify the cost of climate change, no one is happy with the numbers.
Saying it should include externalities is like saying that the scales at the butchers should include nutrition information with weight: that would be cool but that’s not what scales/weight measures are for.
The challenge of doing so is insurmountable, that way is the madness of centralised planning.
The first order positive impacts of burning fossil fuels are accounted for in the price of the fuels. That's what people are paying for. I need to drive a car, here is some money for oil.
What you are apparently talking about are the second order positive impact of fossil fuels. Some upside due to living in an environment of abundant cheap energy. I think you will have to argue more that these second order effects are comparable in size to the first order effects.
PostScript Whoever it is would be much better off getting more access to fossil fuels than having access curtailed. China did not become a wealthy industrial powerhouse with environmentalist policies. The argument that negative externalities are a problem is silly; clearly curtailing fossil fuel access is more damaging. Sucks to be Africa or wherever with spotty oil infrastructure and access. Whether it is technically an externality or not, it is clear that unaffected third parties would benefit from more oil, not less.
The externalities are clearly not being accounted for properly/are not net negative when curtailing a thing causes living standards overall to drop.
Why does your second order effect count, but not readily available sterile hospital materials made of petroleum?
Burning fossil fuels releases CO2 and other chemicals into the air. Many of the other chemicals directly harm your health when you breath them in, so thatthis air pollution, which is a first order physical effect, is also a first order economic effect.
On the other hand, excess CO2 in the atmosphere, another first order physical effect, has no economic impacts. Breathing in an extra 50ppm of CO2 has little impact on us, perhaps a bit to plants. So the first order physical effect of excess CO2 is not an economic effect. But second order physical effect of excess CO2 is increased atmospheric temperature, which again on its has very little economic impact. Its really the third order physical effects of CO2 (higher variability in rains and seasons, storms, melting glaciers) where we really see the economic impacts (failed crops, destruction of property and human life etc). All of these things cause large direct economic damage, so that is your first order negative economic effect of fossil fuels.
It is: we anticipate companies to operate “indefinitely,” which turns to a high market value. Banks sell that stock, pension funds store it, and their activity is accounted for.
What we don’t consider (in the GDP, company valuations, bank transactions, or any metric) is how the millions of people who will survive the first mass wet-bulb death event will react.
The developing world is too dependent on oil and gas. Rapid degrowth in global oil and gas production would lead to mass hunger. It is only the developed world who can afford to stop using oil and gas at the moment. We have to replace the worlds energy needs with something else, before we take environmental choices to cut production. Third world countries suffer without cheap oil and gas.
Would it? Many farmers in developing countries don’t have tractors and don’t use fertilizer. Isn’t their food production less tied to fossil fuels?
But you can't just max out that credit card all the time you know.