President Donald Trump announced Thursday that the United States would withdraw from the 195-nation Paris climate change agreement, but his justification for withdrawing was based on a false and misleading economic analysis.
Trump claimed that U.S. commitments under the Paris accord would cost the country’s GDP $3 trillion, but the report he took that estimate from “does not take into account potential benefits from avoided emissions.”
The report Trump cited, released by NERA Consulting, is extreme. Even the conservative Heritage Foundation estimated less cost from the Paris agreement than the NERA report.
Meanwhile, non-partisan reports offer dire warnings for not addressing climate change. Earlier this year, researchers at the University of California Berkeley found that “unmitigated, climate change could reduce global GDP by over 20 percent by 2100.”
“If future adaptation mimics past adaptation, unmitigated warming is expected to reshape the global economy by reducing average global incomes roughly 23% by 2100 and widening global income inequality, relative to scenarios without climate change,” said the paper from Marshall Burke, Solomon M. Hsiang, and Edward Miguel.
A 2015 report from Cambridge University’s Judge Business School found that the “present value of the damage caused by human-caused climate change from a moderate warming scenario is an astonishing $400 trillion.”
The same year, a report from Citibank found that not addressing climate change will cost $44 trillion by 2060, while investing in low-carbon energy would save $1.8 trillion through 2040, as compared to a business-as-usual scenario.
A 2017 report from the International Renewable Energy Agency and the International Energy Agency found that slowing down climate change could add $19 trillion to the global economy, estimating that the world’s GDP will rise 0.8% by 2050 while creating about 6 million jobs, more than offsetting any losses in profits.
Business Insider added:
“Additionally, from a long-term economic perspective, shifting toward renewable energy would likely be more beneficial for job growth.
The Department of Energy said the renewable sector is booming with solar employment growing by 25% and wind-generation employment growing by 32% in 2016.
Add on the fact that 2.2 million people are employed in the “the design, installation, and manufacture of Energy Efficiency products and services,” and it’s clear that combatting climate change is a big employment driver for the US.”
Morgan Stanley equity strategist Eva Zlotnicka said the job losses in fossil fuels would likely accelerate regardless of Trump’s policies.
“As we’ve noted, economics are still driving, not regulation,” said Zlotnicka in a note to clients after Trump’s announcement. “Our energy commodities team’s fundamental analysis of power generation economics shows that longer term coal cannot compete with natural gas or renewables (even on an unsubsidized basis).”
Vice News added:
“But a clear hierarchy in investment among the nations seems to be emerging, with China at the forefront and committed to a stable level of spending in the years ahead. The country was by far the biggest single spender among developed countries in 2016, at around $78 billion in renewables investment, followed by the European Union at about $60 billion, up slightly from 2015 thanks to big new projects in Germany and Britain. U.S. investment, meanwhile, was $46 billion — down 10 percent for the year, according to the U.N. report.
In January, China’s National Energy Administration forecast the country would invest more than $360 billion in renewable power generation through 2020, a pace of over $70 billion a year.”
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