Climate change is killing our economy — clean energy and climate action can save it

Earth Day comes four days after Tax Day this year. But climate change is now levying a hidden tax on every American, every day of the year.

Last year, climate-related disasters inflicted nearly $150 billion in damage to the nation’s economy, according to data from the National Oceanic and Atmospheric Administration (NOAA). That was up nearly 50 percent from the year before.

For perspective, $150 billion is greater than the gross state product of nearly one-third of our states. It’s more money than Microsoft or General Motors made last year. Spread across the calendar year, it’s the equivalent of setting $400 million on fire and watching it go up in smoke every single day.

And guess who pays for that? You, me, all of us.

The fact is, on this Earth Day, climate change is no longer just an environmental issue or a social issue — it’s an economic concern. And it’s a concern we must confront.

Earlier this month, on the same day the United Nations released the latest Intergovernmental Panel on Climate Change (IPCC) report showing the world is now on a path where it may be too late to avoid ever-increasing climate disasters, the U.S. Office of Management and Budget (OMB) released another worrisome report. According to OMB, mounting climate-related disasters will cost the federal government — read, U.S. taxpayers — $2 trillion every year by the end of the century if we don’t do something to prevent them. That makes the clean-up costs from last year’s 21-named hurricanes, of which four were major hurricanes with winds of 111 mph or greater, wildfires, droughts and flooding look like chump change.

And remember, so far, we’re only talking about the costs of damages from climate-related disasters. A myriad other climate-related costs are soaring, too.

Nationwide, home insurance rates are up 34 percent from a decade ago, according to industry estimates. In some states, residents have seen their insurance rates double in the past year. In the worse cases, insurers refuse to write homeowners’ policies anymore as climate change drives up the risk and cost of disasters.

“Natural disasters” is the latest misnomer as wildfires, extreme flooding and punishing droughts have redefined the causes and require new solutions. Taxpayers spent about $4.5 billion in firefighting costs to battle nearly 50,000 wildfires nationwide, according to figures from the National Interagency Fire Center. We’re spending tens of billions more in taxes to clean up military bases in North Carolina, Florida, Nebraska and elsewhere that were hammered by hurricanes and flooding in recent years.

We’re also paying a hidden climate tax with every restaurant and grocery bill. Between 2020 and 2022, flooding, droughts and other weather disasters help send the cost of corn, soybeans, wheat and other commodities included in the Bloomberg Agriculture Spot Index up nearly 75 percent. Yes, inflation is causing everything to go up, but as the Wall Street Journal put it, “Blame Bad Weather for Your Bigger Bills.”

Fortunately, there are two sides to the coin when it comes to the economics of climate change.

While climate change is killing our economy, clean energy and climate action can save it — and make it stronger, better and more competitive.

Thanks to federal investments a decade ago, solar and wind today is the cheapest power available in most parts of the country. Almost every automaker is now racing to shift to electric vehicles, because they’re better, cost less to operate, and are what Americans want and need to shake the shackles of sky-high gas prices. All of this is creating jobs: More than 3 million Americans now work in clean energy, clean vehicles and energy efficiency.

To blunt the future economic costs of climate change, however, we need to move much, much faster. The good news is we already have the policies written that can do it.

Sitting in the Senate today is budget reconciliation legislation that would invest about $500 billion over 10 years into building a cleaner economy, in part by giving consumers and businesses tax credits to build and buy more clean energy and clean vehicles. With climate-related disasters now costing us $150 billion a year, $50 billion a year for 10 years seems like a bargain.

This Earth Day, we don’t need more speeches or demonstrations or waiting. We need President Biden to get back to work pushing for these overdue investments to expand clean energy and address the costs of climate change. We need Congress to pass the legislation sitting before it. And we need to do it now.

Bob Keefe is executive director of the national nonpartisan business organization E2 (Environmental Entrepreneurs) and the author of the forthcoming book “Climatenomics: Washington, Wall Street and the Economic Battle to Save Our Planet” available May 17.

Tags climate action Climate change Congress Earth Day economy extreme weather Natural disaster taxes

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