Climate Tradeoff Brief: The Economics of Climate Change
Updated: Dec 9, 2022
Oftentimes, the debate over climate action exists in a tradeoff framework. Converting to renewable energy or dramatically modernizing an energy grid would cost too much. However, when that framing is used, it neglects the costs of the status quo. The US today relies on fossil fuel emitting energy sources for almost 80% of our energy. The human cost of this excessive use, both direct and indirect, is around 5 million worldwide deaths every year, with conservative estimates putting future lives lost at over 80 million from now until 2100, not even concerning ecological disasters connected to climate change, like rising sea levels, or superstorms. World economic growth would decrease by at least 13% by 2050 if average world temperatures rose by what researchers called the “likely range of global temperature gains”. In New Hampshire, the costs are already becoming clear: nearly 20% of New Hampshire’s labor force, which is 133,000 people earning a combined $4.9 million a year, will have their health and safety put at risk by 2050, as temperatures skyrocket. Worst of all, even a day of dangerously high heat would cost these workers around $17 million, around $100-200 per person, with this phenomenon of increasing temperatures ensuring less safe working conditions for those most likely at economic risk. These “dangerously hot” days are projected to increase by more than fivefold by 2050, putting both the economic health of the state and those on its economic margins in serious jeopardy.
Additionally, as of 2021, three of the most severe multi-year droughts on record in the last 20 years have been due to that warming. The ecological impacts of climate change, put viscerally by NHPR: “many neighborhoods on the back marshes of Hampton and Rye will be flooded with ocean water around the clock by the end of the 21st century. The ocean will begin to encroach on Route 1A, state parks like Rye Harbor and tidal parts of Portsmouth.” With the UN finding that Northern New England is getting much hotter, much faster than the rest of the world, there are pressing harms and a very scary future that necessitates even the most costly of actions.
Despite these pressing realities, those who oppose substantive government response to climate change in the state of New Hampshire, often do it in the tradeoff framework. Due to the increased salience of climate change for voters in New Hampshire, the downplaying of its effects has become an untenable strategy. As a result, the framework of a tradeoff between the economy and sustainability (referenced above) is introduced. The sole testifier against a bill that would require New Hampshire’s utilities to 100% renewable energy by 2050, a representative of a gas and oil-based trade association out of Massachusetts, claimed that this push would kill small business jobs, citing the need for energy diversity. Despite initially questioning the validity of climate change science in 2017, Governor Chris Sununu has then come around to the idea that climate change is driven by human activity, and that this is an issue. However, actions speak louder than words, as NHPR Reporter Annie Ropeik finds, “So many of Sununu's record number of vetoes have been focused on solar energy policies, on changes to our required renewable energy usage and our climate goals in the state.” He has also, as Ropeik additionally comments, continually claimed that “expanded use of solar power in particular would have negative economic effects.” As a result, Sununu vetoed an earlier bill that would have mandated that state utilities increase the amount of sustainable energy that they would use to provide for their consumers.
Despite framing that would suggest tradeoffs between going towards renewable, that isn’t the case in New Hampshire. Coupled with the serious harms of continuing to rely upon oil and gas outlined above, renewable energy can save money. A project in Claremont in NH was undertaken in part because it was projected to save taxpayers to save twice what it cost. According to Rewiring America, switching to electric heating would save the average NH resident almost $4,000. These savings come from modernizing the grid and small-scale solar operations, which help counteract the exceptionally high heating prices here. Electrification would save New Hampshire over $2 billion per year, a number that does not count the jobs created. Of course, the biggest impact would be the reduction of fossil fuel use. And while economic anxiety around solar persists, MIT (Sununu’s alma mater) found that the cost of solar panels has fallen by 99%. So it's worth, in this debate, framing the transition not as an unbearable cost but as an investment. The benefits of reducing carbon emissions and taking up renewable energy provide many more benefits down the road, both for protecting the environment and advancing our society.