How about jobs, cheaper and better electricity, and the prevention of untold suffering?
The American Jobs Plan (AJP), President Biden’s $2 trillion infrastructure proposal, aims to accelerate the building of a low-carbon economy in the U.S., with roughly half of total spending going towards climate-related initiatives. Would a low-carbon energy system be worth trillions in investment? Peter Z. Grossman argues in The Hill that it would not. Grossman downplays the risks associated with unmitigated climate change and claims that an electricity system with high levels of renewable energy “will in many ways be worse” than our current fossil-fuel dominated system. Instead, he argues, the money would be better spent on causes such as raising people out of poverty, improving health care, and adapting to climate change.
While Grossman acknowledges that “there will be many problems for the world” if global temperatures increase by 3 degrees Celsius, he argues that this level of warming will not lead to the extinction of the human race. Thus, he concludes, “spending trillions on windmills and solar panels seems a waste of resources.” But if the threshold for significant government action is set at extinction of the human species, American efforts in the Great Depression, the world wars, the Cold War, and the COVID-19 pandemic were also a waste. In fact, Grossman’s own recommendations to fight poverty, improve health care, and adapt to rising sea levels (rather than mitigate emissions) don’t make sense in this framework. What’s more, Grossman ignores the benefits that investments in low-carbon technologies yield outside of simply reducing emissions. The climate-related investments made by the AJP are by no means a trivial down payment on building a low-carbon economy, but if done properly, such investments can provide both economic and environmental benefits.
Job creation is one of the most powerful tools to lift people out of poverty, and investments in renewable energy projects have proven to be an effective way to provide Americans with employment. Every $1 million spent on renewable energy projects creates 7.49 full-time-equivalent jobs, versus just 2.65 for $1 million spent on fossil fuel projects. Grossman claims that the transition to a low-carbon power system will raise electric rates, but in reality, transitioning the power system away from fossil fuels will generate savings for consumers in many parts of the U.S. Local renewable resources could already replace 74 percent of the U.S. coal fleet, saving consumers billions of dollars per year. Furthermore, Grossman’s claim that a power grid with high levels of renewables would be more prone to blackouts fails to acknowledge the ways we can build a reliable low-carbon electricity grid. Diversifying energy resources and increasing geographic diversity with more electricity transmission builds a better grid than today, decreasing the risk of blackouts from changing weather patterns.
Grossman points out that government funds should be spent on improving health care, but fails to acknowledge the significant public health benefits associated with transitioning our power system away from fossil fuels. One of the co-benefits of reducing CO2 emissions is the reduction of other hazardous air pollutants, such as PM2.5 and ozone. In 2017, nearly 108,000 premature deaths in the U.S. could be attributed to air pollution. Reducing greenhouse gas emissions from our power sector has the dual benefit of avoiding costs from future climate climate change, and better health and reduced medical costs for Americans today.
The largest benefits of decarbonizing the economy will come from reducing the risks of climate change. Estimates of climate risk should not make us sanguine about the costs of warming temperatures. A 2017 study published in Science suggests that the U.S. can expect about 1.2 percent of GDP loss for every 1 degree Celsius of warming. The U.S. could experience economic damages of 3 to 4 percent of GDP at warming of 3 degrees, on par with the 4.3 percent GDP reduction from the 2008 Great Recession that resulted in significant economic and social harm for millions of Americans. The case for climate action is even stronger when you consider uncertainty in our worst-case estimates of climate risk, which means the economic damages associated with temperature increases might be much larger than we currently anticipate. Mitigating these economic damages is more affordable than once thought. A new study modeling pathways the U.S. can take to achieve carbon neutrality by midcentury found that this could be achieved at a cost of roughly 0.2-1.2 percent of GDP, less than half of the cost of inaction, and this is without accounting for the economic benefits of avoided climate damages and improved air quality. There will be costs associated with climate action, with a recent Princeton report estimating that a net-zero pathway will require $2.5 trillion in additional capital investment to our energy infrastructure in this decade. However, well-designed climate policy can make this transition more affordable, and in fact can make the economy more productive in the long-run.
Although the climate-related investments made by the AJP can reduce costs for consumers and speed the decarbonization transition, alternatives such as a carbon price would accomplish just as much, if not more, in a more cost-effective manner. The revenues from a carbon price could be spent in ways that reduce the costs of the energy transition, stimulate investment, and grow GDP relative to a business-as-usual scenario. It’s clear that building a decarbonized electricity system can put Americans back to work, cut energy costs for consumers, and improve public health more than continuing to operate and invest in a fossil-fuel dominated power system, all while reducing the risks associated with climate change. We should no longer be debating whether climate action is a cause worth pursuing and instead focus on identifying the best tools at our disposal to improve the livelihoods of Americans while reducing the risks of climate change in the long term.