4 Ways the U.S. Can Rapidly Reduce Carbon Emissions and Grow the Economy
Today I testified before the U.S. Senate Committee on Environment and Public Works at a hearing called “Road to Paris: Examining the President’s International Climate Agenda and Implications for Domestic Environmental Policy.” The goal of the hearing was to examine the many ways in which the U.S. can achieve its commitment to reduce emissions 26 to 28 percent below 2005 levels by 2025. But there was also a bigger message that went beyond mere logistics: The country can not only achieve its 2025 climate goals—doing so will actually create economic and quality-of-life benefits.
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Four reasons illustrate why it’s in the U.S.’s own interests to meet its 2025 target and reduce emissions even more so in the long-term:
1. A growing body of evidence shows that economic growth can go hand-in-hand with efforts to reduce greenhouse gas emissions.
The U.S. has tackled many environmental problems over the past 50 years, and the historical record is clear: environmental protection is compatible with economic growth, and environmental policies have delivered huge benefits to Americans. Furthermore, recent experience at the state and national levels demonstrates that well-designed policies can reduce emissions while providing overall net public benefits, for example, through improved public health, as well as direct financial benefits to businesses and consumers.
Policies are often necessary to unlock these opportunities, however, because market barriers hamper investment in what are otherwise beneficial activities. We can achieve a low-carbon future by harnessing key drivers of economic growth—including more efficient use of energy and natural resources, smart infrastructure investments and technological innovation. Our efforts to address conventional air and water pollution have often relied on end-of-smokestack or end-of-pipe controls. However, in the case of carbon pollution, the solutions typically lie in improved efficiency in energy use, cleaner fuels, and new technologies and processes –solutions that often create net economic benefits. For example:
- With strengthened fuel economy standards, drivers will save on average a net $3,400 to $5,000 over the life of light-duty vehicles made in 2025 compared with those made in 2016.
- Federal appliance efficiency standards put into place over the past 25 years have resulted in $370 billion in cumulative utility bill savings for consumers.
- States with energy efficiency target programs in place are saving customers generally $2 for every $1 invested.
2. The U.S. greenhouse gas emissions reduction target for 2025 is ambitious but achievable.
The Obama administration set a goal to reduce overall emissions 26-28 percent below 2005 levels by 2025. Recent WRI research finds that can meet this target using existing federal laws combined with state actions.
However, U.S. and global efforts to combat climate change cannot stop in 2025. Even deeper emissions reductions will be needed in the decades ahead to avoid the worst impacts of climate change. In the years ahead, Congress can play a constructive role to reduce emissions in a cost-effective manner, such as by establishing an economy-wide price on carbon. In the meantime, the administration is taking sensible steps to reinforce recent market and technology trends that move us toward a low-carbon future.
3. We can achieve the 2025 target while generating multiple co-benefits and maintaining economic growth.
The proposed Clean Power Plan will reduce power sector emissions and act as key policy for meeting the 2025 greenhouse gas emissions target. It will also reduce particulate pollution and ozone, leading to reductions in premature deaths, heart attacks, asthma attacks, hospital admissions, and missed school and work days. The U.S. Environmental Protection Agency (EPA) estimates that these air pollution co-benefits alone are worth $25-62 billion, far more than the estimated $7-9 billion in compliance costs. Adding in global climate benefits increases total benefits to $55-93 billion. And the economy will keep growing. The Energy Information Administration (EIA) projects the macroeconomic impacts of the proposed Clean Power Plan to be very small—approximately a 0.12 percent decrease in GDP in 2030, in the context of an economy projected to grow from $17 trillion currently to $24 trillion in 2030. EIA’s projected net employment impacts are essentially zero.
4. U.S. leadership is essential to global climate efforts.
Scientists agree that limiting global temperature rise to 2 degrees Celsius (3.6 degrees Fahrenheit) is necessary to prevent some of the worst impacts of climate change. Failure to meet that goal will increase economic, social and environmental risks for the U.S. and all nations. Our communities are already experiencing the consequences of more frequent and severe climate-change related events. The costs to businesses, consumers and public health will continue to mount if the U.S. and other countries fail to reduce emissions.
The world experienced the hottest year on record in 2014. Fourteen of the 15 hottest years on record have occurred since 2000. In the U.S., some regions are experiencing a higher frequency of flooding, heavier precipitation events, and more frequent heat waves and wildfires. Our American citizens’ lives and livelihoods are at risk. We can’t simply ask: How much does it cost to avoid climate change? We must also ask: What does it cost our country if we don’t avoid climate change? If nations fail to combat climate change, the U.S. will suffer billions of dollars of damages to agriculture, forestry and fisheries; significant coastal and inland flooding; and heat-driven increases in electricity bills, among other multiple impacts.
Our country has a choice: It can show international leadership and bring the same spirit of competition, ingenuity and innovation to the climate challenge that it has brought to solving other problems. Or, it can be left behind as other countries develop the solutions and capture the markets for the fuels, technologies and processes that reduce greenhouse emissions.
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