Climate policy is expensive, but so is climate change

Climate policy is expensive, but so is climate change
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As we approach election season, climate change is shaping up to be a prime topic for discussion — and it’s no coincidence.

In recent years, we have seen record breaking wildfires, hurricanes, heat waves and floods rip across the country with alarming frequency. Youth climate movements, school walkouts and other demonstrations calling for government action on climate change have sprung up as a result. The 2018 U.S. midterm election even brought with it a team of fresh, young faces who are determined to make climate policy and energy innovation a core issue.

Yet, as climate policy takes the stage, we’re already seeing discussions on the economic costs of such policy that make no mention of the glaring elephant in the room; namely, the cost of climate change. Simultaneously, age-old misconceptions pitting the environment against the economy resound.  

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The so-called Green New Deal, introduced by Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezRepublicans plot comeback in New Jersey Joseph Kennedy mulling primary challenge to Markey in Massachusetts The latest victims of the far-left's environmental zealotry: Long Islanders MORE (D-N.Y.) and Sen. Ed MarkeyEdward (Ed) John MarkeyJoseph Kennedy mulling primary challenge to Markey in Massachusetts Overnight Energy: Trump sparks new fight over endangered species protections | States sue over repeal of Obama power plant rules | Interior changes rules for ethics watchdogs To cash in on innovation, remove market barriers for advanced energy technologies MORE (D-Mass.) back in February provides a recent example. Much talk about the Green New Deal has centered around massive cost estimates, including an American Action Forum (AAF) study that put a $53 trillion to $93 trillion price tag on the resolution. By picking the upper estimate and rounding up by another $7 trillion, President TrumpDonald John TrumpO'Rourke: Trump driving global, U.S. economy into recession Manchin: Trump has 'golden opportunity' on gun reforms Objections to Trump's new immigration rule wildly exaggerated MORE even produced his own $100 trillion cost estimate. Never mind that it’s too premature to estimate the cost of the Green New Deal, given its non-specific language.

A more salient point is that these numbers reflect a “cost” analysis, not a “cost-benefit” analysis. That is, the AAF study makes no attempt to weigh the positives of the Green New Deal against the negatives. Put another way, the estimated cost fails to consider the reason we’re even talking about the Green New Deal — that is, "climate change." It discusses the upfront economic costs of the resolution without taking into account the costs incurred in the absence of the resolution due to global warming.

Climate-related natural disasters in the U.S. have racked up nearly $800 billion in economic costs in this decade alone, which is up four-fold compared to the 1980s. And natural disasters aren’t the only climate-related costs we can expect. The recent U.S. National Climate Assessment estimates future warming to cause up to 2 billion lost labor hours annually by 2090 due to temperature extremes, costing an estimated $160 billion in lost wages.

The report also notes losses in some economic sectors projected to reach hundreds of billions of dollars per year by the end of the century. This doesn't include the enormous public health costs of air pollution from burning fossil fuels, causing around 200,000 deaths in the U.S. annually, or the poisoning of waterways and other instances of environmental destruction that arise from coal mining, fracking, etc. In short, climate change and business-as-usual energy production are expensive.

All told, the annual economic impacts of climate change in the United States will likely cost around 5 percent of GDP by the end of this century, or roughly $1 trillion per year. Over time, these astronomical costs begin to resemble the costs of the Green New Deal. Although, climate mitigation comes with the added perk of preventing catastrophic climate impacts and human mortality. This is not to say the Green New Deal is the perfect way forward. However, it does highlight an imperative piece to be factored in when weighing the costs of climate policy.

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Alongside the misleading price tags that tend to accompany proposed environmental policies, there is another age-old industry mantra that deserves correction: that environmental regulation will cripple the economy. History tells a different story. If we look at the last three decades of the 20th century when U.S. environmental law began to seriously grow and take shape, we find that the economy was generally thriving. Harvard Law School Professor Richard Lazarus points out that “the actual cost of pollution controls have . . . almost always proved to be less than those industry projected in initially opposing their imposition.”

In 1990, industry estimated that VOC pollution controls applied to stationary sources would cost $15 billion per year. What was the actual cost? Less than $1 billion. In 1989, the utility industry opposed acid rain programs to limit sulfur dioxide emissions, claiming it would cost $4 to $7 billion per year. The actual price tag was about $1 billion to 2 billion per year.

Turning to the automobile industry, strict pollution controls on cars have never been favored, with some manufacturers calling emissions reductions “impossible.” Such claims were again exaggerated, as Corporate Average Fuel Economy standards forced innovation that enabled fuel efficiency to increase, tailpipe emissions to decline, and air quality to improve as a result.

And let’s not forget the dangerous hole in the ozone layer. When science identified chemicals called CFCs as the culprit, industry quickly moved to their standard defense, claiming that a CFC ban would result in “major economic disruption.” Yet, innovation lead to a new chemical that was safer for ozone. Our environment was protected, and the economy prospered.

As we now face the even greater challenge of climate change, one must keep this history in mind. We can indeed maintain economic prosperity while protecting our air, waterways, lands, oceans and climate. What’s more, we have solutions at our disposal.

While the Green New Deal is but one example, let us not forget that a separate bill exists on the table of Congress today that would dramatically reduce greenhouse gas emissions. The Energy Innovation & Carbon Dividend Act (H.R. 763), if passed, would put at price on atmospheric carbon pollution, and in turn reduce carbon emissions by an estimated 40 percent in the first 12 years. Such a bill is consistent with key aspects of the Green New Deal and is regarded as more politically viable.

Economists have long agreed that a price on carbon is the most economically efficient way to address climate change. Whether or not Congress will agree will likely depend on public support. Thus, the role of each citizen remains essential if we’re to see proposed climate policy ultimately become law.

Shahir Masri, Ph.D., is the author of "Beyond Debate: Answers to 50 Misconceptions on Climate Change." He is an air pollution scientist at the University of California at Irvine, and also teaches at the Schmid College of Science and Technology at Chapman University. Follow him on Twitter at @ShahirMasri.