Writer: Natalie Bouzas
Editor: Mira Khan
Spring 2024
Within the past seven years, 137 separate disasters have killed 5,500 people and cost 1 trillion in damages in the United States alone (Smith, 2024). From Category 5 hurricanes, wildfires, sinking islands, and severe thunderstorms, it has become apparent that the increased effects of climate change threaten national security worldwide. If we want to continue to breathe fresh air and walk outside without inhaling lung-damaging particulate matter, we must take steps to mitigate climate change. However, the interests and control of the fossil fuel industry stand in the way of our human rights to a clean earth. Economists support the fossil fuel industry, risking the lives of citizens because they fear a policy of climate change mitigation would damage the economy, but it does not have to. Adapting market-based climate policy can mitigate climate change while ensuring climate regulation does not impede economic growth.
A mitigation strategy to combat climate change requires the reduction of greenhouse gas emissions (i.e., carbon dioxide, methane, and nitrous oxide). In theory, it sounds pretty simple: reduce the toxic-to-breathe gas in our atmosphere and enjoy the fresh air, but it is never that easy. Since the beginning of the Industrial Revolution, countries have used fossil fuels as the primary tool to grow their economy. However, the fossil fuels that have made these countries rich are also threatening our climate with carbon emissions, and today, nothing has changed. Oil company BP reported that fossil fuels accounted for 84% of global energy consumption in 2019 (Rapier, 2022), but they also account for three-fourths of global emissions (Ritchie, 2024). Because of the great size of the fossil fuel industry and the wealth it has brought countries in the past, many think that economic growth must be linked to fossil fuel energy and are scared to move to a greener economy.
Does that mean carbon mitigation and reducing fossil fuel energy are synonymous with economic downfall? Not at all! Many forms of climate change governance heavily consider the economic implications of their policy, allowing for a smoother transition to a green economy. To illustrate this point, I will use carbon taxes as an example. Carbon taxes are a great solution to bridge the disconnect between the environment and the economy. A carbon tax sets an additional price on fossil fuels, reflecting the social cost of emitting carbon (World Economic Forum, 2022). The social cost of carbon quantifies the environmental and economic damages that market prices do not automatically reflect (Blackman, 2021). As a result of adding a price to carbon emissions, the prices of fossil fuel energy increase, and those responsible for the damages of emissions pay the price. Increasing the price of carbon-emitting energies also incentivizes companies to find cleaner energy, which could increase efficiency.
On the other hand, carbon taxes could disproportionately impact lower-income households. Because they spend a more significant percentage of their income on necessities, an increase in the price of energy could have a harsh impact on their spending. Additionally, lower-income households might be unable to afford a switch to clean energy. In response to this, the government can use the revenue generated from the taxes to cancel out the disparities in their applications. They can offer rebates to lower-income households that, if done correctly, cancel out the disparity. Carlos Curbelo used this strategy in a 2018 proposed bill to Congress, in which households in the bottom 20% of the income distribution would receive rebates from 10% of the revenue generated (Kaufman, 2019). The additional revenue can be invested into sustainable energy projects, creating jobs and further stimulating the economy.
Public opinion has supported such climate actions, but carbon taxes have yet to be implemented at any government level in the United States. According to a 2021 Pew Research survey, most Americans support proposals to reduce the effects of climate change, with 70% of participants supporting a carbon tax (Tyson et al., 2021). However, a significant partisan divide is found under closer scrutiny, with the majority of Republicans valuing increased jobs, economic growth, and limited regulations on businesses over protecting the environment (Tyson et al., 2021). In a New York Times article titled "Why We Don't Have a Carbon Tax," Krugman (2022) argues that any policy that reduces greenhouse gas emissions will result in the displacement of jobs in the fossil fuel industry, as climate policy does not offer a credible promise of the creation of new jobs. Krugman (2022) further claims that Joe Biden's Inflation Reduction Act uses subsidies instead of carbon taxes for this reason and that the time for a carbon tax is later as the economy decarbonizes and green energy becomes a more powerful interest group.
Conversely, the US Department of Energy (2023) found that clean energy jobs have grown 3.9%, adding 114,000 jobs to the economy nationally. The Secretary of Energy added that this job growth reflects an accelerating transition to clean energy (Department of Energy, 2023). Fossil fuels are limited and will eventually run out, so switching to renewables is inevitable. The problem lies with the fear of economists that a switch to clean energy would ruin the economy, but this is no longer the case. Society must decouple economic growth from carbon emissions to achieve a green economy where economic growth and climate mitigation are compatible. The richer a country is no longer means the more carbon it emits. A 2023 World Bank survey shows that many countries, including the UK, France, Germany, and even the US, have increased their GDP while decreasing CO2 and consumption-based emissions (Ritchie, 2024). The battle between the economy and the environment is no longer one of profit but one of politics.
Climate action bills stand little chance with the increasing polarization of partisanship in Congress. A 2021 survey from the Pew Research Center illustrates a 53% average gap between Democrats (high eighties) and Republicans (high thirties) who think that the government needs to do more to reduce the effects of climate change (Tyson et al., 2021). The survey further shows that 79% of Democrats think protecting the environment for future generations is "very important," while only 46% of Republicans do (Tyson et al., 2021). On the other hand, 65% of Republicans think increasing jobs and economic growth is "very important," indicating that Republicans prioritize the economy over climate action (Tyson et al., 2021). With party values increasingly contrasting, compromise in federal policy for the environment is often too weak or hard to make. Republican Senator Lindsey Graham of South Carolina even says, “[He doesn’t] want to be lectured about what we need to do to destroy our economy in the name of climate change” (Friedman & Weisman, 2022).
We must do what we can to change this mindset. The government should continue investing in and growing green industries and training workers looking to enter green jobs. Education should be expanded to cover environmental science from a younger age. The Earth needs society to accept that fossil fuels threaten our future, and a change to green energy is needed for survival. We must enlighten society on the idea that a growing economy does not have to cause a dying world. A green economy is possible; people just need help seeing it.
References
Blackman, I. (2021, June 7). Professors Explainer: Social cost of carbon. Stanford News.
DOE Report Finds Clean Energy Jobs Grew in Every State in 2022. Energy.gov. (2023, June
Friedman, L., & Weisman, J. (2022, July 20). Delay as the New Denial: The latest Republican
Tactic to Block Climate Action. The New York Times. https://www.nytimes.com/2022/07/20/us/politics/climate-change-republicans-delay.html
Kaufman, N. (2019, April 2). What You Need to Know About a Federal Carbon Tax in the
United States . Center on Global Energy Policy at Columbia University SIPA | CGEP. https://www.energypolicy.columbia.edu/publications/what-you-need-to-know-about-a-federal-carbon-tax-in-the-united-states/
Krugman, P. (2022, August 16). Why We Don’t Have a Carbon Tax. The New York Times.
Ritchie, H. (2024, February 20). Many countries have decoupled economic growth from CO2
emissions, even if we take offshored production into account. Our World in Data. https://ourworldindata.org/co2-gdp-decoupling#:~:text=First%2C%20some%20countries%20have%20managed%20to%20decouple%20energy,the%20emissions%20that%20used%20to%20come%20with%20it.
Rapier, R. (2022, June 20). Fossil Fuels Still Supply 84 Percent of World Energy - And Other
Eye Openers From BP’s Annual Review. Forbes. https://www.forbes.com/sites/rrapier/2020/06/20/bp-review-new-highs-in-global-energy-consumption-and-carbon-emissions-in-2019/?sh=66651f3766a1
Ritchie, H., Rosado, P., & Roser, M. (2024, January 5). Emissions by sector: Where do
greenhouse gases come from?. Our World in Data. https://ourworldindata.org/emissions-by-sector
Smith, A. B. (2024, January 8). 2023: A historic year of U.S. billion-dollar weather and climate
disasters. NOAA Climate.gov. https://www.climate.gov/news-features/blogs/beyond-data/2023-historic-year-us-billion-dollar-weather-and-climate-disasters
State Carbon Taxes: Overview. Carbon Tax Center. (n.d.). https://www.carbontax.org/u-s-
Stone, C. (2015, September 21). The design and implementation of policies to protect low-
income households under a carbon tax. Center on Budget and Policy Priorities. https://www.cbpp.org/research/the-design-and-implementation-of-policies-to-protect-low-income-households-under-a-carbon
Tyson, A., Kennedy, B., & Funk, C. (2021, May 26). 2. Climate, Energy and Environmental
policy. Pew Research Center . https://www.pewresearch.org/science/2021/05/26/climate-energy-and-environmental-policy/
What are the advantages and challenges of a carbon tax?. World Economic Forum. (2022,
February 4). https://www.weforum.org/agenda/2022/02/what-a-carbon-tax-can-do-and-why-it-cannot-do-it-all/
What is a carbon tax? how would it affect the economy?. Peter G. Peterson Foundation.
(2021, September 30). https://www.pgpf.org/budget-basics/what-is-a-carbon-tax-how-would-it-affect-the-economy
Commenti