Will addressing climate change devastate the economy?
In a recent blog (“Global warming must be addressed now”, Real-World Economics Review, 9 May 2017), macro- economist Dean Baker ridiculed the idea that replacing fossil fuel energy technology with renewable energy technology will be necessarily harmful to the economy. Here is an extract from his longer article:
“…. the idea that addressing the problem [of climate change] will devastate the economy is nonsense.
“The price of solar energy and wind energy has plunged in the last two decades. Both are already competitive with fossil fuel energy in many parts of the country, even without subsidies.
“Modest subsidies, coupled with modest fossil fuel taxes, would go far toward reducing our emissions of greenhouse gases. And these would hardly bankrupt the economy.
“Most analysts believe that a $40 per ton tax on carbon would be sufficient to allow the United States to meet the commitments it made in the Paris agreement negotiated under President Obama. A tax of this size would raise the price of a gallon of gas by 40 cents, not a negligible amount but hardly one that would devastate our economy.
“And there’s a big upside to clean energy. The solar industry already employs four times as many people as the coal industry.
“We need to both manufacture the solar panels and have people install them on the roofs of houses and businesses. This industry can be the source of hundreds of thousands more jobs as the industry grows and the technology improves.
“The same story applies to electric cars. It’s great that we still have many good-paying jobs in the auto industry, but there is no reason that we can’t employ as many people – or even more – producing electric cars. Here, technology is also improving rapidly so these cars can be more competitive.
“Addressing climate change should not be a tough choice. We can both sustain a strong economy and sharply curtail our greenhouse gas emissions. There is no excuse for President Trump’s environment-threatening executive order. ”
Source: Real-World Econ Rev, 9 May 2017 https://rwer.wordpress.com/2017/05/09/global-warming-must-be-addressed-now/