Is There Any Truth to Claims That We Can't Afford Comprehensive Climate and Energy Legislation and It Would Cost Thousands of American Jobs?

Ask a Scientist - December 2010

S. Hutson from Gainesville, FL, asks "My legislators in Washington, D.C. have voted against climate and energy legislation claiming that we can't afford it and that it would cost thousands of American jobs. Is there any truth to this?" and is answered by Climate Economist Rachel Cleetus, PhD

No, it’s not true. Taking action to fight climate change is good for our country and will bring numerous economic, public health, and security benefits. In fact, the most costly and risky thing we can do is nothing because that ensures that global warming emissions will continue rising—this path will likely lead to costly impacts like more extreme weather events, sea-level rise, and threats to energy and water resources.

Let’s start with why climate and energy legislation would be good for the economy. A comprehensive program to reduce global warming emissions would stimulate the economy by spurring investment and innovation in clean technologies, creating new business opportunities, and creating new jobs. Other countries like China, Germany, and India are ramping up their clean energy investments and we must step up if we want to retain leadership in this burgeoning global market. Of course, to this list of benefits we should include all the avoided costs of unchecked climate change.

Unfortunately, the coal and oil industries, who are more interested in their own short-term profits, are standing in the way of this progress. They have been engaged in a disseminating a steady stream of false and misleading information on climate science and economics, such as the information you cite. In fact, independent analyses of the recent climate bills by the Environmental Protection Agency, U.S. Energy Information Administration, and Congressional Budget Office show that the bills would have had a negligible effect on the economy and would have helped transition us to a cleaner, more efficient energy system. Yet the fossil fuel industries spent $175 million in 2009 to lobby against clean energy and climate policies and have succeeded in halting such legislation. (We are of course working hard to make sure this is only a temporary setback.)

2009 analysis by UCS found that a comprehensive suite of climate and energy policies can help make deep cuts in our emissions—and can be done in a cost-effective manner. Although these policies do require upfront investment, the economic results are impressive, with consumers and businesses reaping a net annual savings of $255 billion in 2030. Consumers alone would save more than $126 billion in 2030, about $900 per U.S. household: $320 from lower costs for electricity, natural gas, and heating oil and $580 from lower transportation costs.

But like I said in the beginning, you can’t look at the economics of climate legislation without considering the costs associated with not taking action to curb our global warming emissions.

Unchecked climate change means more sea level rise, heat waves, droughts, flood risk, public health threats, and more—all with a hefty price tag. A Tufts University report, The Cost of Climate Change: What We'll Pay if Global Warming Continues Unchecked, found that doing nothing could cost the United States alone $3.8 trillion annually by 2100. And the longer we wait the harder and more costly it will be to limit climate change and to adapt to those impacts that can't be avoided.

That's why the time to act is now. Investing in a clean energy is exactly what we need in a down economy to spur growth and create new jobs, as well as avoid costly climate impacts in the future. Please urge your legislators to recognize the importance of, and vote for, smart climate and energy policies. 

Dr. Rachel Cleetus is an economist with the UCS Climate and Energy program. She holds a Ph.D. and an M.A. in Economics from Duke University and a B.S. in Economics from West Virginia University. The focus of her work is designing and advocating for effective global warming policies at the federal, regional, state and international levels. These include policies that put a price on carbon, as well as sector-based approaches to promoting efficiency, renewable energy, and R&D in clean technology. She also analyzes the economic costs of inaction on climate change.