Climate change is often discussed in terms of science, but many people are against initiatives to combat climate change due to economic reasons. However, studies show that reducing greenhouse gas emissions could boost the economy rather than slow it down.
According to the 2014 New Climate Economy Report, roughly $90 trillion USD will be spent in the next 15 years on new infrastructure around the world. However, adopting rules that would redirect that investment towards a more eco-friendly option makes more economic sense. Taking action on climate change is affordable.
Although the initial cost of going green may seem intimidating, it only takes about five percent more than the amount spent on new power plants, transit systems, and other infrastructure. These newer eco-friendly changes may actually end up saving money in the long-run, according to the Global Commission on the Economy and Climate; secondary benefits of greener policies include reduced medical bills, lower fuel costs, and decreased air pollution.
“Of the $6 trillion we will spend a year on infrastructure, only a small amount–around $270 billion per year–is needed to accelerate the shift to a low-carbon economy, through clean energy, public transport systems and smarter land use,” said Felipe Calderon, chairman of the Global Commission on the Economy and Climate. “And this additional investment could be entirely offset by operating savings, particularly through reduced fuel expenditures”
One of the biggest environmental problems is the carbon dioxide building up in the atmosphere. William Nordhaus, author of “The Climate Casino,” developed calculations representing the cost of carbon dioxide emissions. He proposes taxing carbon dioxide emissions, and tackling climate change with the tools of economics.
“The real point of the pricing is not to gouge people, not to extract resources from people. It’s to tilt the playing field in such a way that people, firms, government—everybody moves toward carbon-free or low-carbon activities,” Nordhaus says.
Like Calderon, Nordhaus claims that although this cost may initially seem great, we will reap the benefits decades later. As well, we are gambling with our future if we don’t do anything about climate change. The challenge isn’t in the economics—it’s in human behavior.
Recently, the U.S. Environmental Protection Agency (EPA) extended the public comment period for its proposed rule for regulating carbon dioxide emissions from existing power plants to 45 days. Janet McCabe, the EPA’s assistant administrator for the Office of Air and Radiation, says the extension is due to the great interest of stakeholders.
“While we’ve heard quite a bit so far, we know that there are many individuals and groups continuing to work to formulate their input,” McCabe said. “We want the best rule possible, and we want to give people every opportunity to give their ideas and contributions.
Although the long term benefits of going green are present and economically viable, it will not be politically easy to achieve. For instance, one of the proposed steps of achieving better energy and agriculture infrastructure involves eliminating subsidies for fossil fuels, which cost $600 billion a year. Due to these initial large costs and the clout of fossil fuel companies, going green will be highly controversial.
However, this type of action will urge nations to take a fresh look at the potential of renewable energy, which is becoming increasingly available and affordable.