The financial crisis is currently at the front and center of the national debate, but if we limit our focus to near-term fixes on the economy, we will just defer requisite action on climate.
It makes sense to frame this issue around risk. The current economic downturn occurred because we misunderstood the risk and regulatory needs of the financial sector. Similarly, we are willfully ignoring risk of climate, and refusing to regulate performance. If we do not do something to regulate greenhouse gas emissions more effectively, in 20 years we will see the negative effects of climate change on a grand scale. Now is the time to take these risks into account.
It’s also important not to view this situation as an either/or proposition between a healthy economy and a healthy environment. If done right, climate legislation can help spur a recovery and reduce greenhouse gas emissions. We can do so by incentivizing a transition towards a new green energy system with massive investments in energy efficiency and cleaner technologies.
New research is emerging that calls for climate-friendly green investments to spur economic recovery. A recent Deutsche Bank study found that governments have a “historic opportunity” to stimulate growth through investments in green energy. And as Professor Robert Pollin of the University of Massachusetts-Amherst recently told Congress: “There is no reason at all to delay taking action now to fight global warming. A green investment agenda--focused primarily on measures to dramatically improve energy efficiency but on advancing renewable energy commercialization as well--can itself serve as a powerful engine of job creation in the short run.”
In addition, we can structure policy in a way that has minimal impact on consumers. Lawmakers have discussed several ways to do this, such as a carbon tax and direct rebate to consumers, or efficiency allowance allocations meant to encourage the electric sector to reduce ratepayer costs.
Regardless of the path we choose, we shouldn’t be afraid that climate policy will stymie the economy’s recovery. Rather, we can use climate policy to help to assist our recovery and put us on the path toward a more climate-friendly energy system.
Ultimately, it is not a question of whether we pay to limit the climate risk, but how. We either pay today with increases in electric costs offset by gains in efficiency and long term energy security. Or we pay later with reduced competitiveness of US industry in the global clean tech market; we pay later with huge adaptation costs; and we pay later with a less stable world.