This post originally appeared on the site of CGC’s campaign for a federal Green Bank.
What would our reaction have been during the great recession if the U.S. government did nothing to fix the economy, and even denied the financial collapse existed? Denial of an economic threat on a similar scale is happening today, with respect to the climate crisis.
A new study from the National Bureau of Economic Research shows that it’s sadly too late to avoid all economic damage from climate change. But we absolutely can and must avoid the severe economic harms that will result if we don’t take meaningful and immediate steps to reduce greenhouse gas emissions.
The study finds that the real US GDP per capita will be 10.52% lower in 2100 if no action is taken to address climate change. This is compared to a drop of only 1.88% if mitigation policies in line with the commitments of the Paris Agreement are implemented.
To put this in context, real GDP per capita in the US fell by 5% during the great recession. This means the projected loss in economic welfare attributable to climate change is twice as acute as that felt during the greatest economic disaster of most of our lives.
During the market crash of 2007 and the great recession that followed, complacency was not a politically and economically viable approach. Across the political spectrum, extreme urgency reigned. Both parties agreed that hundreds of billions of dollars of public money had to be invested. The only debate was on how many hundreds of billions and where it would go.
That same debate has to be repeated today. Our government should be debating how many billions of dollars to invest in the clean energy transition to avoid the economic disaster of climate change, and where that money should go to maximize emissions reductions- while also holding down energy costs.
The National Climate Bank needs to be central to this government mobilization. The proposed $35B non-profit national Green Bank should be a key plank in the government’s effort to combat the harm looming over all Americans. The Climate Bank can spark up to $1 trillion of total investment, drawing in private capital to projects like building solar and wind renewable power plants, deploying electric vehicles, and decarbonizing GHG-heavy industrial processes.
This investment not only will help the US avoid the economic disaster of climate change; it will also spark growth and jobs by stimulating new sectors of the American economy. And because the Climate Bank would prioritize projects that serve low-income, minority and underserved communities, the economic benefits would be enjoyed by all Americans.
If 2019 is the year Americans finally understand the damage of climate change, perhaps this can also be the year we recognize the looming economic disaster and the need to act.