climate mitigation economyA few weeks ago, the Center for Climate Strategies released a study showing that making national policy of 23 measures already in play in Red and Blue and Purple states across the nation would lead to millions of additional jobs and significant carbon reductions.   This study shows, quite clearly, that serious climate mitigation efforts should not be discussed as “cost”, but as “investment” that will lead to significant benefits.  Two notable items about this study:  1. The strongly supported conclusion that the more aggressive the action, the greater the economic benefits.  and 2. This is a conservative study.

by A Siegel, Author of the Get Energy Smart! NOW! blog.

The Center for Climate Strategies recently released a major study on the Economic Impacts of Comprehensive U.S. Climate and Energy Policy (report summary). This study details how 23 strategies, if undertaken as part of a national policy, would result in

  • 2.5 million net new jobs and a $134.3 billion expansion in GDP in 2020; with a cumulative expansion in GDP of $342 billion from 2010 to 2020;
  • Over $5 billion in net direct economic savings by businesses and households in 2020, at an average net savings of $1.57 per ton of GHG emissions avoided or removed;
  • Reduced consumer energy prices for gasoline, fuel oil, coal, natural gas and electricity.
  • Reducing U.S. GHG emissions to 27 percent below 1990 levels in 2020, significantly more than targets called for by proposed legislation or the President.

The study makes it clear that climate mitigation efforts, at any level, will have economic benefits … but that the benefits of weaker action fall well below the economic benefits of more serious action. This is powerful information that merits serious attention as it is coming out on the eve of what will almost certainly be an underwhelming (if not counterproductive) legislation proposal from Senators Kerry, Graham, and Lieberman (KGL) next week.

However, while this is powerful, this looks to be yet another case where those working to honestly lay out the costs and benefits of climate mitigation action have taken a very cautious path forward and are not looking toward the full systems-of-systems benefits related to climate change action.

Here are some examples of where there looks to be overly conservative (e.g., pessimistic about benefits and too high on costs) conclusions:

The study team used a peer-reviewed model (REMI) and are tracking the direct cost/benefits only. The reality: just as Climate Change is a systems-of-systems challenge/risk, the benefits from action are also systems-of-systems. Stovepiping to direct costs/benefits ends up understating the benefits. Again, greening the workplace leads to higher productivity (whether industrial or office). Greening Schools improves student performance while saving money and reducing pollution. White roofing 100s of buildings in an urban area doesn’t save money for just one building owner due to lowered air conditioning bills, but reduces the ambient temperature for the whole community and further reduces air conditioning requirements. Reducing overall pollution loads will reduce illnesses and reduce health care costs and improve productivity due to reduced employee absences. And …

When it comes to the analysis of the costs and benefits of acting to mitigate climate change, we face the reality that those fighting against action are willing to lie, deceive, and foster untruths to scream falsehoods about “how much action will cost” while those working to foster honest and truthful discussions almost unanimously remain overly cautious, understating the benefits that would accrue from action.

The historical record shows quite clearly that the claimed costs from those fighting against environmental protections have been exaggerated when it comes to the actual experience. And, the supporters of that environmental protection have, almost universally, understated the benefits to accrue from action. The Clean Air Act (CAA) and action to protect the Ozone Layer (reducing CFCs) represent two poster children of this pattern. As Senator Jeff Merkley put it recently,

I’m reflecting back on how every single time in this nation, when we have confronted great damage to our air or to our water, it is always the same mantra: ‘it will kill jobs’. And every single time when we look back 10 years later, 20 years later, we’re so thankful that we actually created jobs by cleaning up our waterways, we created jobs by cleaning up our air, and we’re going to create jobs by cleaning up carbon dioxide pollution as well.

Thus, it is something rather astounding to note. Even with this (overly) cautious approach that leads to a significant understatement as to the cumulative benefits of climate action, this report makes it clear that acting to mitigate climate change (with just these 23 strategies) will benefit the U.S. economy significantly. And, again with that understating of what is possible (probable), this report makes it clear that the economy does better with more aggressive, rather than tamer, action to mitigate climate change.

PS: The CCS also doesn’t seem to include the most important value of action: the avoided costs due to reducing the impacts of catastrophic climate chaos.

NOTE: For related discussions, see McKinsey’s systematic under valuingof the value of efficiency and Nobel prize winner’s must-read with a significant omission.

For, in contrast, a quite bad study, see: CAP’s “American Fuel”: Contaminated on many levels

Hat tip to Solve Climate and see their article for an excellent overview of the CCS study on the benefits of a 23 strategy national climate mitigation program.

See also Brad Johnson, Wonkroom, REPORT: Smart Cap And Trade Will Boost Growth, Create 2.8 Million Jobs, And Cut Carbon Pollution :

A new macroeconomic analysis of green economic policies finds that cutting global warming pollution will make the economy grow faster. The Center for Climate Strategies (CCS), building upon analysis they did of state-level climate plans for the National Governors Association, analyzed the economic and environmental impact of legislation… As long as state-level policies are boosted instead of pre-empted, CCS found that previous economic analyses by federal agencies and industry groups are wrong. This CCS analysis finds that instead of slowing the economy, household wealth and jobs will grow faster in a green economy

And, again, this is a pessimistic and conservative study almost certainly understating the extent of benefits …

ONE LAST NOTE: To be clear, this is conservative in the sense of the third definition:

3. Moderate; cautious: a conservative estimate

© 2010, A. Siegel. All rights reserved. Do not republish.

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Author: A. Siegel (2 Articles)

A Siegel analyzes energy-related issues, whether looking to Energy COOL technologies, fiscal payoff periods, governmental policy, or environmental impacts. His work can be found at Get Energy Smart! NOW!.