How to address climate change and create jobs
By Bill Blancato
One way to answer the question of whether we should do something about climate change is to compare the costs of doing nothing with the costs of doing something. Another is to look at the risk and how much it costs to control the risk, like insurance. There is a very small chance your house will catch fire, but almost every homeowner has insurance to protect against the risk. It makes economic sense to pay a relatively small sum to avoid economic catastrophe. Likewise, the costs of climate change can be catastrophic, but the harm can be addressed with a simple solution that will add jobs and grow the economy.
Some interesting data about the cost of climate change has been issued in the past few months. In July, the White House Council of Economic Advisers reported that if something is not done to adequately reduce carbon emissions, climate change could cost the economy $150 billion per year. This is not a one-time cost, but one that will be incurred year after year.
In June, Climate Central of Princeton reported that mid-range sea-level rise projections lead to at least a 50 percent chance of floods more than 4 feet above the high-tide line by 2050 from the town of Beaufort. North Carolina’s danger zone has 61,000 homes and $9 billion of property. In South Carolina, the danger zone has 54,000 homes and $24 billion of property. Climate Central’s reports and an interactive map.
In June, a report about the economic risks of climate change in the United States was issued by President George W. Bush’s Treasury Secretary Henry Paulson, former New York City Mayor Michael Bloomberg and founder of Farallon Capital Management Tom Steyer. Their report, based on peer-reviewed climate science projections through the year 2100, predicts that “if we continue on our current path, by 2050 between $66 billion and $106 billion worth of existing coastal property will likely be below sea level nationwide, with $238 billion to $507 billion worth of property below sea level by 2100.” More property will be at risk during high tide and from storm surges. They also reported that increasing temperatures will negatively impact outdoor businesses such as construction and agriculture. Simply put, climate change will likely lead to huge disruptions in our economy, not to mention quality of life. Their report can be found at http://riskybusiness.org/.
The economic risk of climate change is substantial. There will also be plenty of human suffering. As sea levels rise, millions of people will be displaced. It will make Hurricane Katrina seem like a minor annoyance.
Ninety percent of economists agree that putting a price on carbon is the most efficient way to reduce the carbon emissions that are contributing to climate change. Citizens Climate Lobby (https://citizensclimatelobby.org/) (“CCL”) has proposed putting a fee on carbon-emitting fossil fuels and returning all funds collected to the public via direct payments to households. The proposal includes a tariff on goods imported from countries that do not put a similar price on carbon. Such a revenue neutral fee and dividend would enable low- and middle-income people to preserve their purchasing power in the face of inevitable higher energy costs. In addition, the fee and dividend proposed by CCL will spur job creation and economic growth.
Regional Economic Models, Inc. (“REMI”) studied CCL’s proposed fee and dividend. REMI is a well-respected nonpartisan economic consulting firm. REMI found that CCL’s proposal would increase national employment by 2.1 million jobs in 10 years and 2.8 million jobs in 20 years, GDP would increase between $70 billion and $80 billion per year and CO2 emissions would drop by 33 percent in 10 years and 50 percent in 20 years. Instead of imposing a cost, a revenue-neutral carbon fee and dividend helps the economy grow and reduces emissions of greenhouse gases.
Adopting a revenue-neutral carbon fee and dividend makes economic sense regardless of climate change. Given the substantial risks posed by climate change, it is reckless to do nothing when the most economically sound solution has no costs and will create jobs and grow the economy.
Bill Blancato is a Winston-Salem attorney who has organized a local group for Citizens’ Climate Lobby, which is lobbying Congress to adopt a revenue-neutral carbon fee and dividend.