Reducing greenhouse gas emissions in the United States doesn’t hurt the economy—in fact, it can actually benefit the economy by saving businesses and consumers money and improving public health.
That’s the big finding of our new study, Seeing Is Believing, which analyzes opportunities to reduce greenhouse gas emissions in the United States. We examined five areas—electric generation, electricity consumption, passenger vehicles, natural gas, and hydrofluorocarbons (HFCs)—which together account for 55 percent of U.S. greenhouse gas emissions. In each case, we found that reducing emissions can yield significant economic benefits even before you factor in the advantages of avoiding drought, sea level rise, and other climate change impacts.
The study builds on the groundbreaking report, Better Growth, Better Climate, which found that international climate action and economic growth can go hand-in-hand. Here’s a look at some of the economic benefits the United States could achieve by reducing its emissions:
Reduce the Carbon Intensity of Electric Generation
Producing cleaner power is more economically attractive than ever before. The prices of solar panels decreased 80 percent since 2008. Natural gas plants cost less than new coal generation, and renewable energy is cheaper than either fuel in a growing number of markets.
Consider the following:
19-44%: How much cheaper new natural gas generation is than new coal generation in the United States.
5 cents: Price per kilowatt hour from Austin Energy’s new solar project, thanks to a power purchase agreement and federal tax incentives. New natural-gas-fired generation would cost 7 cents per kWh, coal 10 cents, and nuclear 13 cents. At these rates, solar is competitive with natural gas generation even without tax credits.
$10 million: Amount annual electricity bills are projected to drop for customers of Iowa’s MidAmerican utility, due to increased wind power. The new wind generation will create 460 construction jobs, 48 permanent jobs, and more than $360 million in new property tax revenue.
$83-$241 per person: Amount American ratepayers in different areas of the country could save each year with increased renewable energy generation. That amounts to tens of billions of dollars nationwide.
Reduce Electricity Use in Homes and Businesses
Energy efficiency can reduce electricity use while saving consumers money on energy bills. For example:
$10 million: Minimum the gas industry will save each year from recent standards that reduced methane leaks, without accounting for the health benefits of decreased air pollution.
$1.5 billion: Increased revenues the industry could earn annually if all producers adopted best practices. This would also reduce U.S. greenhouse gas emissions by 150 million metric tons by 2020.
$2,640: Average public health damages from each metric ton of VOCs emitted from natural gas systems, which emit millions of tons of VOCs each year.
Reduce Consumption of HFCs
Emissions from HFCs, commonly used as refrigerants, are on the rise in the United States. The global warming impact of certain HFCs can be thousands of times greater than carbon dioxide. Scaling back their use yields climate and efficiency benefits:
1 million: Number of HFC-free coolers Coca-Cola uses, which will prevent emissions of about 5.25 million metric tons of CO2 over 10 years.
15%: Savings Heineken achieved on the price of its coolers once it purchased HFC-free coolers at a large scale.
Embracing a Low-Carbon Economy
While these numbers illustrate the economic opportunities associated with climate action, we’ll need the right policies in place to fully realize them. And over the long term, the country will need to go beyond these “win-win” opportunities and take greater action across all economic sectors to avoid the most disastrous impacts of climate change.
Meanwhile, the costs of climate inaction continue to add up. The conditions that led to the 2011 Texas heat wave—which caused $5 billion in livestock and crop losses—are 20 times more likely to occur today than in the 1960s. The costs of these climate impacts are projected to rise, and action is urgently needed to reign in warming. According to the President’s Council of Economic Advisors, each decade of delay will increase the cost of mitigation by 40 percent.
The numbers speak for themselves. The question now is which pathway policymakers and businesses will choose. Will they take advantage of the opportunities presented by a new climate economy? Or will they endure the mounting costs associated with a high-carbon future?