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The Long Story Short - Green New Dilemma
Do the costs of fighting climate change outweigh the benefits?
(Note: related companies are at base of the story and all the sources listed in the "Balanced" section)
The Green New Deal (GND) is a congressional resolution proposed by Democratic Congresswoman Alexandria Ocasio-Cortez and Democratic Senator Edward Markey. It calls for a cut in greenhouse-gas emissions to net zero over 10 years while at the same time guaranteeing family-sustaining jobs, high-quality health care, and affordable housing. It is supported by several prominent Democratic senators and presidential candidates such as Cory Booker, Kirsten Gillibrand, Kamala Harris, Amy Klobuchar, and Elizabeth Warren. While the resolution is unlikely to pass and is legally unbinding, it does raise questions about the trade-offs between protecting the environment and supporting economic growth.
Climate change is costing us trillions. Proponents
of increased attention to climate change argue it is not only the right thing
to do, but it may also be the economic thing to do. A study by the DARA group, an independent
non-profit humanitarian organization, estimates that climate change is
resulting in 400,000 deaths and costing $1.2 trillion annually. Another study by the United Nations
University and the UN Development Programme provided a similar annual cost
estimate of $1.15 trillion. The
Intergovernmental Panel On Climate Change believes a cost of $54 trillion
between 2018 and 2040 would be incurred in response to an expected 2.7 degree
increase in temperatures associated with global warming.
Green New Deal could extinguish our economy. Opponents
of the GND believe the negative economic impact of adoption outweigh the
positive social impacts. They point to a
loss in the economic strength of the United States relative to other
countries. President Trump’s chief
economic advisor, Larry Kudlow, believes the GND would “destroy the economy”
and estimates it will cause the loss of 10-15% of GDP. The American Action Forum estimates that the
GND could cost as much as $51 trillion to $93 trillion over the next decade.
It's a balancing act. While difficult to quantify, it is reasonable to believe that pursuing a zero emissions policy will have a disruptive effect on the economy. It would certainly impact certain sectors more than others. Coal, oil, and gas producers would be devastated. On the other hand, manufactures of nuclear power and electric cars would benefit. The effect on utilities would vary depending on their operations, but overall the sector would most likely be negatively impacted unless they are allowed to recover higher costs with higher rates.
Climate change is already damaging global economy, report finds, The Guardian, September 25, 2012.
Global warming set to cost the world economy £1.5 trillion by 2030 as it becomes too hot to work, Ian Johnston, Independent, July 19, 2016.
Major Climate Report Describes a Strong Risk of Crisis as Early as 2040, Coral Davenport, The New York Times, October 7, 2018.
Alexandria Ocasio-Cortez's Green New Deal Could Cost $93 Trillion, Group Says, Ari Natter, Bloomberg, February 25, 2019Trump's top economic adviser: 'The Green New Deal will literally destroy the economy', Kate Sullivan, CNN, February 28, 2019.