ECONOMIC IMPACTS

Shouldn’t the economy be the top priority? Why act on climate change now?

Tackling climate change is about the economy – preventing economic harms from climate impacts and seizing economic opportunities in clean energy and a low-carbon economy.

The world is moving to clean energy – and there is an emerging multibillion dollar global industry rising up to meet that demand.
We are in a global race to build the new energy economy. Millions of engineering, manufacturing and technical jobs are up for grabs.

China is spending $12.6 million every hour on clean energy. HSBC Global Research estimates that nearly 40 percent of China’s proposed $586 billion stimulus plan – $221 billion over two years – is directed at low-carbon technology investments. This is equivalent to 3% of China’s 2008 GDP on green investments. In contrast, the American Recovery and Reinvestment Act includes $112 billion over the next two years, 0.5% of U.S. 2008 GDP.

America can choose now to capture the technological edge and become a primary mover in this market, or it can lag and become dependent on others for this energy.

Energy is the largest industry, by revenue, in the world. It represents the next breakout technology sector. Clean energy technology will do for energy what IT has done for information and communications.

Putting a price on carbon will eliminate uncertainty, provide clear incentives and regulatory guidelines and deliver the market signal that will unleash innovation and spur billions of dollars in investment capital in clean energy technology.

According to an analysis conducted by Collaborative Economic for the Pew Center on the States, Tennessee had 15,507 clean energy jobs in 2007, was home to 1,090 clean energy businesses, and attracted 16,329 million in venture capital.

Which is it? Will these policies punish states that depend on cheap and plentiful coal or will it help them make the transition to a low-carbon economy?

The US relies on coal for a huge portion of its electricity; even if we quickly adopt renewable energy, we will not replace coal soon.

On a per-capita basis, coal-reliant states are among the top recipients of consumer assistance funding under current Congressional proposals for climate and energy legislation.

Current climate and energy legislation contains substantial investment for research, development and deployment of technologies such as carbon capture and sequestration (CCS) to help ensure that coal remains viable and to provide a stimulus for new technology development.

Fossil fuel industry jobs are a tiny portion of the economy. In fact, renewable energy and energy efficiency create 10 times more jobs per dollar invested.

Today, the US coal industry employs over 86,000 people. Meanwhile, the number of people employed in renewable energy in California alone is 170,000.

One million dollars invested in the coal industry creates only 3.96 jobs – while that same amount invested in wind creates 5.7 jobs and when invested in solar, it creates 5.65 jobs.

How will these policies impact farmers and agriculture sector?

There are significant opportunities for the agricultural sector under climate and energy legislation, such as growing biofuels feedstock. Current legislation provides significant support for farmers and ranchers to generate offsets for carbon sequestration practices.
Recent analysis of the implications of comprehensive climate and energy legislation for the agricultural sector by the University of Tennessee shows that under a properly constructed cap-and-trade program, net returns for virtually all major crops are positive, up to $13 billion per year.

Furthermore, it is important to consider the impacts that not taking action to combat climate change would have on the agricultural sector. According to a June 2009 report from the US Global Change Research Program, inaction will allow climate change to cause significant harm to the Southeast, including increased heat-related stresses for people, plants, and animals, decreased water availability, sea-level rise, increased hurricane frequency, and major disruption to native ecosystems.

How will these policies affect small business?

Small businesses have great potential for growth in the new energy economy. Energy efficiency is a huge economic driver. By saving consumers money on fossil fuels – which are not job-intensive – energy efficiency essentially puts billions of dollars back into the largest driver of GDP: consumer spending. A dollar saved on fossil fuel energy is a dollar spent on goods and services inside the state, which grows small business.

By diversifying our energy supply and improving energy efficiency, small business will be better protected from the volatile swings of fossil fuel prices.

Small businesses have enormous energy efficiency potential – wasting energy is like burning money. Every business person knows that efficiency is good for the bottom-line.