CNN Money claimed that if the U.S. heeds Pope Francis' call to address climate change it will hurt the economy and cost jobs, but CNN based these claims on a six-year old analysis of failed cap-and-trade legislation rather than recent research showing that the climate plan the Obama administration has put in place will benefit the economy and increase employment. CNN also alleged that the U.S. is hesitant to act on climate change “without other nations around the world doing the same,” despite the fact that 78 countries have already submitted climate change plans ahead of international negotiations that will occur in December.
CNN Wildly Off The Mark On Pope Francis' Call For Climate Action
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CNN Critiques Pope's Call For U.S. To Act On Climate Change As Costly, Citing A 2009 Study About A Defeated Climate Bill
CNN Money Cites 2009 CBO Report About Cap-And-Trade Bill To Claim Climate Action Would Hurt Economy And Cost Jobs. CNN Money published an article on September 24 headlined: “Pope Francis wants climate action. What's the cost?” The article cited a 2009 report from the Congressional Budget Office (CBO) to claim that “the bottom line is it will cost people and businesses a lot”:
Francis wants action. But what would it cost?
The typical American family would end up spending $700 to $1,100 more a year.
That's according to the Congressional Budget Office.
Estimates vary widely, but the non-partisan CBO report is seen as a pretty fair projection. It's possible those costs could end up being a lot less if the government gave families subsidies to help alleviate the hit.
But the bottom line is it will cost people and businesses a lot.
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Jobs would be lost and economy would take hit.
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There will be job losses, although estimates are hard to come by. The general consensus is there will be winners and losers.
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The CBO analysis was done in 2009 when there were active bills in Congress to do some sort of carbon tax or cap-and-trade plan. Economists see those approaches as the least harmful because they give businesses the greatest latitude to innovate.
But the bills died in the Senate. President Obama has attempted to take some action by proposing limits on power plants emissions.
The CNN Money article noted that "[s]upporters of taking action point out that not addressing climate change will have a very negative impact on the economy," but did not cite any specific figures to that effect. [CNN Money, 9/24/15]
The article was listed on the front page of CNN Money with the headline: “The Pope wants climate action. It'll cost you $1,000.”
[CNN Money, accessed 9/25/15]
But Analyses Of The U.S. Climate Plan That Is Actually In Place Show Taking Action Will Bring Economic Benefits And Jobs
Landmark U.S. Climate Plan Will Bring Economic Benefits That Outweigh The Costs. The Environmental Protection Agency (EPA) has determined that its Clean Power Plan, which establishes the first-ever carbon emission limits on power plants and is a key part of Obama's Climate Action Plan, will bring net economic benefits. As the Union of Concerned Scientists noted, the EPA found that the rule “will deliver billions of dollars in net benefits each year, estimated at $26 billion to $45 billion in 2030.” [Union of Concerned Scientists, 8/5/15]
Independent Study Found EPA Clean Power Plan Will Boost Jobs. A report by Doug Meade of the University of Maryland's Interindustry Forecasting Project and Jason Price of Industrial Economics found that the Clean Power Plan will likely increase U.S. employment by up to 273,000 jobs. InsideClimate News reported on the findings:
The Environmental Protection Agency's proposal to crack down on carbon pollution from power plants would create more than a quarter of a million additional jobs, according to a new analysis by economists using a trusted, sophisticated model.
The findings support the EPA's argument that the benefits of its approach exceed the costs, and undermine the claims of the fossil fuel industry that the rules would cripple the economy.
“The proposed Clean Power Plan is likely to increase U.S. employment by up to 273,000 jobs,” said the report, which extends the forecast out to the year 2040. “For perspective, this is roughly the equivalent of one month of healthy job gains.”
Significant job losses at shuttered coal-fired plants and at coal mines would be offset not only by investments in cleaner sources of power, but also by productivity gains across the whole economy--and by overall reductions in wholesale prices of electricity, the authors said. [InsideClimate News, 4/21/15]
Recent Studies Show Acting On Climate Change Will Benefit The Economy, Failing To Take Action Will Be Extremely Costly
Citibank Report: Investing In Low-Carbon Economy Would Save Trillions. A September report from banking giant Citibank found that shifting to a low-carbon economy would save trillions of dollars in reduced energy costs and avoided climate impacts:
The energy industry is faced with choices, and in this report, we outline two scenarios: 1) a business as usual or 'Inaction' on climate change scenario, and 2) a different energy mix that offers a lower carbon alternative. We find that out to 2040 the levels of spend are remarkably similar; indeed the 'Action' scenario actually results in an undiscounted saving of $1.8 trillion over the period, as while we spend more on renewables and energy efficiency in the early years, the savings in fuel costs in later years offset earlier investment.
If the scientists are correct, the potential liabilities of not acting are equally vast. The cumulative 'lost' GDP from the impacts of climate change could be significant, with a central case of 0.7%-2.5% of GDP to 2060, equating to $44 trillion on an undiscounted basis. If we derive a risk-adjusted return on the extra capital investment in following a low carbon path, and compare it to the avoided costs of climate change, we see returns at the low point of between 1% and 4%, rising to between 3% and 10% in later years. [Citi, August 2015]
New Climate Economy Report: Acting On Climate Change Can Spur Economic Growth. The Global Commission on the Economy and Climate, chaired by former heads of government, economists, and other experts, determined in its 2014 New Climate Economy report that “countries at all levels of income now have the opportunity to build lasting economic growth at the same time as reducing the immense risks of climate change. This is made possible by structural and technological changes unfolding in the global economy and opportunities for greater economic efficiency.” Reuters reported:
Investments to help fight climate change can also spur economic growth, rather than slow it as widely feared, but time is running short for a trillion-dollar shift to transform cities and energy use.
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“It is possible to tackle climate change and it is possible to have economic growth at the same time,” Felipe Calderon, a former Mexican president and head of the Global Commission on the Economy and Climate, told a news conference.
Many governments and businesses wrongly fear that measures to slow climate change will undermine jobs and growth, he said. [New Climate Economy, accessed 9/24/15; Reuters, 9/16/14]
White House Council of Economic Advisers Report: Failure To Act On Climate Will Cost U.S. $150 Billion Per Year. The White House Council of Economic Advisors released a report in 2014 detailing the economic costs of not acting on climate change. Based on “a leading aggregate damage estimate in the climate economics literature,” the report found that the nation will suffer at least $150 billion in economic damages each year if global temperatures increase by two degrees Celsius or more above pre-industrial levels:
Based on a leading aggregate damage estimate in the climate economics literature, a delay that results in warming of 3° Celsius above preindustrial levels, instead of 2°, could increase economic damages by approximately 0.9 percent of global output. To put this percentage in perspective, 0.9 percent of estimated 2014 U.S. Gross Domestic Product (GDP) is approximately $150 billion. The incremental cost of an additional degree of warming beyond 3° Celsius would be even greater. Moreover, these costs are not onetime, but are rather incurred year after year because of the permanent damage caused by increased climate change resulting from the delay. [Whitehouse.gov, July 2014]
Risky Business Project Report: “Business As Usual” Approach To Climate Will Lead To Large-Scale Property Loss And Decreased Productivity. The Risky Business Project, which is chaired by former New York City Mayor Michael Bloomberg, climate philanthropist Tom Steyer, and Former Treasury Secretary Henry Paulson, released a report in 2014 that provided a comprehensive analysis of the potential economic impacts of unchecked climate change in the United States. The report determined that the current path of “business as usual” -- emitting carbon dioxide and other greenhouse gases responsible for driving catastrophic climate change without restrictions -- could reduce labor productivity of outdoor workers by up to three percent, reduce agricultural yields by up to 70 percent in some regions, and likely place $238 to $507 billion worth of property below sea level by 2100. In an op-ed for The New York Times, Paulson called for business leaders to weigh in on the risks of climate change to prevent an economic crash on the scale of the 2008 financial crisis or worse. [Risky Business Project, June 2014; The New York Times, 6/21/14]
Contrary To CNN's Suggestion That U.S. Would Be Acting Alone, Many Countries Have Committed To Strong Climate Action
CNN Money Article Suggested That U.S. Would Be Acting Alone If It Heeded Pope's Call On Climate Change. The CNN Money article predicted that the pope's call for climate action will “collide” with “economic and political reality,” adding that the U.S. is “hesitant to act without other nations around the world doing the same.” [CNN Money, 9/24/15]
But 78 Countries Have Submitted Climate Change Plans To The United Nations. A total of 78 countries (including the E.U., which is comprised of 28 member states) have submitted plans to reduce greenhouse gas emissions -- known as “Intended Nationally Determined Contributions” (INDC) -- to the United Nations as of 3:10pm ET on September 25, according to the United Nations website. The World Resources Institute wrote that the INDCs “will largely determine whether the world achieves an ambitious 2015 agreement and is put on a path toward a low-carbon, climate-resilient future.” [UNFCCC, accessed 9/24/15; WRI.org, accessed 9/24/15]
As Early As March, 33 Countries Representing More Than Half Of Global Carbon Emissions Had Already Announced Plans For Reductions. The United States, China, Mexico, Switzerland, Norway, and the 28 countries in the European Union had announced post-2020 climate targets as of March 31. As White House advisor Brian Deese explained, these countries account for over half of global emissions from the energy sector according to Energy Information Administration data:
