THE ECONOMIC PERIL OF FAILING TO TACKLE CLIMATE CHANGE

The UK recently had its hottest day on record. “Train tracks buckled, roads melted, and thousands were stranded because it was out of the norm,” said Kamiar Mohaddes, an economist at the University of Cambridge. “Such events take an economic toll, and will only become more frequent and severe without policies to address the threats of climate change.” 

He is a co-author of a study by researchers from the International Monetary Fund (IMF), the University of Southern California, the University of Cambridge, and National Tsing Hua University. The Washington Post’s Andrew Freedman described it as “the latest in a string of reports from the United Nations and global financial institutions and others showing that climate change constitutes a looming financial risk.”

The researchers said climate effects across the U.S. economy were broad. Each of the 10 economic sectors studied, including agriculture, manufacturing, mining and trade, were affected by at least one climate variable, Politico reported. 

“The United States will be one of the countries that will suffer the most (reflecting sharp increases in U.S. average temperatures by 2100),” Mohaddes said. The researchers estimated that climate change would cost the U.S. economy 10.5 percent of GDP per capita and reduce global GDP per capita by 7.2 percent by 2100 if greenhouse gas emissions remain unchecked.

Meeting the Paris climate accord's goals would blunt negative economic effects from climate change, the paper said. The U.S. economy would shed just 1.88 percent of its GDP by 2100 by reaching the Paris deal's target of curbing emissions 26 percent to 28 percent below 2005 levels by 2025, according to the researchers. Opponents of the Paris agreement, including the Trump administration, have argued the non-binding pact would wreck the economy.

Some politicians maintain that the United States can innovate and adapt its way to managing climate change. The researchers don’t see it that way. They said the speed at which countries adjust and adapt to shifting historical norms correlates to the size of income losses: "Overall, while climate change adaptation could reduce these negative long-run growth effects, it is highly unlikely to offset them entirely. ... The evidence appears to suggest that (at least for now) adaptation has had limited impact in dampening the negative effects of climate change in the United States."

And adaptation is not inexpensive. Consider this excerpt from a New York Times story by Christopher Flavelle: “After three years of brutal flooding and hurricanes in the United States, there is growing consensus among policymakers and scientists that coastal areas will require significant spending to ride out future storms and rising sea levels — not in decades, but now and in the very near future. There is also a growing realization that some communities, even sizable ones, will be left behind.”

Flavelle cited a report by the Center for Climate Integrity, an environmental advocacy group, which estimates that, by 2040, simply providing basic storm-surge protection in the form of sea walls for all coastal cities with more than 25,000 residents will require at least $42 billion. Expanding the list to include communities smaller than 25,000 people would increase that cost to more than $400 billion.

The three most expensive cities to protect with sea walls, the group says, would be Jacksonville, New York, and Virginia Beach. The Times’ article has the full top ten.

All of the above is more evidence that it makes economic sense to act more quickly to limit climate change. Most economists are convinced that putting an honest price on carbon pollution is our best option. It’s time for Congress to take that advice.

FLURRY OF CARBON FEE BILLS IN CONGRESS

As our planet neared the end of the hottest month ever recorded, several carbon-tax bills landed in the hopper on Capitol Hill. 

The push to regulate greenhouse gas emissions comes as both Democrats and Republicans face pressure from their constituents, and in some cases the fossil fuel industry itself, to regulate carbon emissions that lead to climate change. The influx of legislation is surprising some observers who have long called for action on climate change, wrote The Hill’s Miranda Green. “They say they wouldn't have believed a year ago that there would have been such a push.”

Young Republicans’ concern about the climate is one impetus for action. Kiera O'Brien, former president of the Harvard Republican Club and now vice president of Students for Carbon Dividends, testified, “[L]ike me, so many of my peers on both sides of the aisle are exhausted by the partisan bickering, the divisive entrenchment, and staunch unwillingness to compromise.” Appearing July 25 before the Senate Democrats' Special Committee on the Climate Crisis, she said, “The climate does not care who has scored the latest partisan shot. Neither does the economy, nor do the people whose lives have been and will be upended by climate uncertainty and instability.”

The “obvious, no-brainer tool for curbing carbon emissions,” wrote columnist Catherine Rampell, is “putting a price on carbon. A carbon tax (or its cousin, a cap-and-trade system) is almost universally embraced by economists on both the left and the right. With good reason, too. Taxing carbon means pricing in, upfront, the implicit costs that come from using fossil fuels — especially, though not exclusively, the cost of warming our planet.”

Republican Congressman Francis Rooney (FL) recently introduced a bill that would place a tax of $30 per metric ton of CO2 equivalent on fossil fuel producers and large industrial emitters. An automatic $2 per ton increase will occur every two years if emissions reduction goals are not met. Modeling by Resources for the Future suggests the tax would reduce energy-related carbon pollution by approximately 42 percent by 2030 against 2005 levels.

Other recent bills came from 1) Democratic Senators Chris Coons (DE) and Dianne Feinstein (CA); 2) Rep. Jimmy Panetta (D-CA); 3) Rep. Daniel Lipinski (D-IL); and 4) Rep. John Larson (D-CT). Coming soon, reportedly, is a measure from Republican Congressman Brian Fitzpatrick of Pennsylvania.

These bills follow four offered earlier this year: 1) H.R. 763 [Rooney and Rep. Ted Deutch (D-FL)]; 2) H.R. 1960 [Rep. Don Beyer (D-VA)], 3) S. 940 [Sen. Chris VanHollen (D-MD)], and 4) S. 1128 [Sens. Sheldon Whitehouse (D-RI), Brian Schatz (D-HI), Martin Heinrich (D-NM), and Kirsten Gillibrand (D-NY)].

The measures differ in the initial fee, the rate of increase, the use of the resulting revenue stream, and in other ways. But all of them would use the free market to drive down greenhouse gases by putting a more honest price on carbon emissions.

“Even the least aggressive price path would significantly reduce U.S. emissions beyond the Paris agreement targets,” wrote Marc Hafstead of Resources for the Future. “In the current political climate, it is unlikely that any of these bills will become law. But the discussion they raise will hopefully help future policymakers find common ground and perhaps set the stage for future bipartisan action that confronts the climate challenge.”

“Given the unprecedented level of movement in Congress surrounding carbon tax legislation,” wrote Columbia University’s Center on Global Energy Policy,” the Center’s Carbon Tax Research Initiative has produced an online guide: “What You Need to Know About a Federal Carbon Tax in the United States.” It provides a high-level overview of carbon-pricing basics, the major decisions that policymakers confront when designing a carbon tax, the implications of those decisions, and the proposals in Congress today. In addition, Jason Ye of the Center for Climate and Energy Solutions has analyzed such legislation.

Another glimmer of hope on Capitol Hill came via the Senate Committee on Environment and Public Works. Before Congress left for its August recess, the panel passed--unanimously--a five-year highway bill that contains a first-of-its-kind title dedicated to addressing climate change. It proposes raising spending levels by 27 percent in part to pay for $10 billion in climate-focused programs and policies. The measure would provide $4.9 billion over five years to help states improve the resiliency of their infrastructure to natural disasters and extreme weather.

Americans who believe that we need national action to counter the climate challenge should encourage their senators and representatives to support the bills that would put a price on carbon.

Medical and public health groups warn of threats posed by climate change

“The health, safety and well-being of millions of people in the U.S. have already been harmed by human-caused climate change, and health risks in the future are dire without urgent action to fight climate change,” according to a report issued June 24 by 74 medical and public health groups.

AP’s Elana Schor reported that the groups are pressing elected officials and presidential candidates to “meet and strengthen U.S. commitments” under the 2015 United Nations climate agreement from which Trump has vowed to withdraw. They’re also pushing for some form of carbon pricing [emphasis added]...and “a plan and timeline for reduction of fossil fuel extraction in the U.S.”

The American Medical Association, the American Heart Association, and the American Lung Association are among the respected organizations that teamed up to urge action. Another of the 74, the American College of Physicians, recently told the House Natural Resources Committee: 

“Because physicians are on the front lines of patient care, they are witnessing – here and now – the harmful health effects that climate change can and does have on the human body.

“These harmful effects include: higher rates of respiratory and heat-related illness, increased prevalence of vector-borne and waterborne diseases, food and water insecurity, and malnutrition. 

…... “As climate change worsens, an increase in global temperature and frequency of heat waves will raise the risk of heat exhaustion... Asthma and other chronic lung conditions will be exacerbated by increased particulate matter and ground level ozone in the atmosphere. Exposure to infectious disease from vectors such as mosquitoes and ticks has and will continue to escalate. An increase in heavy downpours and flooding in America and the world has already, and will continue to, lead to an increase in waterborne diseases.”

The efforts of these major groups follow the findings released in December by the Lancet Countdown—a coalition of international research organizations collaborating with the World Health Organization and the World Meteorological Organization. The group tracks the health impacts of—and government responses to—climate change.

“It affects everyone around the world—every single person, every single population. No country is immune,” says Nick Watts, executive director of the Lancet Countdown and one of the report’s many co-authors, as reported by Tanya Lewis in Scientific American. 

The report said that warmer temperatures have increased the geographical ranges of organisms that spread dengue fever, malaria and cholera. 

Climate change also threatens food security. Our planet still produces more than enough food for the world, but 30 countries have seen crop yields decline as a result of extreme weather, the report found.

June’s record-setting European heat wave was another reminder of the health threat posed by extreme weather. The Guardian reported that it was the hottest June since 1880, both in Europe and around the world, according to separate data released on Tuesday by the EU’s Copernicus Climate Change Service. The heat wave was made at least five times more likely by climate change, scientists have calculated.

“This is a strong reminder again that climate change is happening here and now. It is not a problem for our kids only,” said Dr Friederike Otto, of the University of Oxford, one of the scientists behind the new analysis.

The hottest summers in Europe in the last 500 years have all come in the last 17 years, The New York Times’ Somini Sengupta reported. “Critically, several nighttime minimum temperature records were also broken,” she wrote. “A series of extremely hot nights can be lethal, because it deprives the body of the recovery period that normally comes after sunset.” In Hamburg, 141 runners collapsed during a half-marathon.

Meantime, two years of drought in Chennai, an Indian city on the Bay of Bengal, has left reservoirs and lakes parched and wells dry. Residents line up as early as 4 a.m. in hopes of filling buckets at a public pump.

“The daily travails of millions of people in Chennai are a harbinger of things to come for the country, warn experts, who say India faces a looming water crisis as its population grows, urbanization intensifies and global temperatures rise,” wrote Niha Masih and Joanna Slater in The Washington Post.

Then there is the opposite threat. NPR reported that torrential rains have created dangerous conditions in southwestern Japan, prompting evacuation orders for more than 1.1 million people in the Kyushu region. "Please take action to protect your lives," Prime Minister Shinzo Abe said on Wednesday, according to The Japan Times.

We agree with the 74 medical and public health groups: It’s high time the U.S. put an honest price on carbon. 

Wild Weather Is Taking A Toll

One day recently, page three of The Wall Street Journal had three headlines: 1) Fire Threat Spurs Utility to Cut Power, 2) Farmers Wait and Fret as Soggy Fields Delay Planting, and 3) Flooding Takes Toll on Small Missouri Town.

If there had been more room on that page, we might have seen these recent Wall Street Journal headlines: “May Was Among the Worst-Ever Months for Tornadoes” or “CFOs Are Underestimating the Financial Risks of Climate Change, Executives Say,” over a story with an emphasis on how extreme weather is likely to affect companies’ bottom lines.

It sounds like we need to do something about our changing climate.

Many Californians would certainly agree. PG&E, the giant California power provider, cut off 21,600 businesses and homes the second weekend in June after the National Weather Service issued a red-flag warning. Red signifies high fire risk. You may recall that an investigation concluded that the company’s equipment sparked last year’s Camp Fire, which killed 85 people and laid waste to the town of Paradise. PG&E has warned that there will be more power shutdowns as wildfire “season” stretches toward 12 months. Companies in other states with wildfire vulnerability may follow suit, and any businesses enduring such power lapses can expect their revenues to dip.

Of course, farmers are taking enormous hits from extreme weather. Our nation is experiencing the wettest 12-month period on record. From South Dakota to Ohio, The Wall Street Journal reported, relentless storms have significantly postponed planting. As of June 2, just 33 percent of corn had been planted in Ohio, where the five-year average is 90 percent, according to USDA. “It’s going to be a year without income basically,” Doug Hafer, 48, a seventh-generation farmer in LaRue, Ohio, told reporter Kris Maher. He, his brother, and father started planting on May 26, the latest in 30 years.

“The level of financial, emotional and mental stress on farmers is significant as a result of late planting in 2019,” Eric Richer, an Ohio State University extension educator in Fulton County, told The Washington Post’s Laura Reiley. “The spring of 2019 is like no other I’ve seen in my career. The new normal for farmers is weather extremes, and that’s difficult to manage.”

Down in Long Beach, Mississippi, a fifth-generation commercial fisherman named Ryan Bradley knew that he, too, would become a victim.  

The water that fell on all that fertilizer-enriched farmland made its way through streams and rivers into Bradley’s fishing grounds in the Gulf of Mexico. Tiny algae burst into bloom, then died, sank and decomposed on the ocean floor — a process that sucks all the oxygen from the water, turning it toxic, as The Washington Post described it. Fish suffocate or flee, leaving nothing to harvest.

Scientists predict that we will see one of the largest-ever “dead zones” in the Gulf of Mexico. An area the size of New Jersey could become almost entirely barren this summer. “It’s just a major punch in the gut,” Bradley told The Post’s Sarah Kaplan.

Then there are indirect effects of the floods. Because of the high water, officials in Minnesota could not treat some rivers with larvicide in May, The Journal reported, leading to an explosion of the black fly population. In Jordan, Minnesota, a single trap caught 127,000 black flies in one night. That’s not a typo--127,000 in one night. Some chickens in the area died of suffocation because the flies blocked their airways.

The mounting financial toll is receiving more attention in Washington, as it should. A June 11 report by the Government Accountability Office (GAO) said that the federal government must invest in resilience and make government-wide plans to manage climate change risks in order to prevent billions of dollars in future disaster aid costs. The government has spent $450 billion in disaster aid since 2005.

“Climate change is an environmental issue. It’s a public health issue. It’s a national security issue. And... it’s increasingly an economic and fiscal issue,” House Budget Committee Chairman John Yarmuth (D-KY) said in a statement opening a June 11 hearing by his panel.

“The only people who fail to understand the seriousness of climate change are the Trump administration and some of our Republican colleagues,” Yarmuth said. “If they are not moved by environmental, health and security consequences, I hope the economic costs and the impact on the federal budget will get their attention — because we cannot afford to wait for them to catch up.”

Perhaps more of them will start to “catch up.” A June memo from the Republican survey firm, Luntz Global Partners, and obtained by The Hill, said: "Climate Change is a GOP VULNERABILITY and a GOP OPPORTUNITY… Yes, Republican voters want a solution. It is on measures of salience to vote that we have detected the greatest change… The appetite for seeing real action is palpable to voters of both sides." Many of the likely voters Luntz spoke with are angry that GOP leadership has "ceded the issue to the Dems."

The quickest, most efficient, and most powerful tool to reduce the cooking of our planet is an honest price on the carbon that is causing most of the trouble. All of us need to deliver that message to those who represent us in Congress.

S. Africa Is Latest Nation to Turn to Carbon Tax

On June 1, South Africa became the latest country to take the advice of the world’s most-respected economists and implement a carbon tax. There are now 46 national jurisdictions and 28 subnational jurisdictions that have implemented a price on carbon, or are scheduled to do so, according to the Carbon Pricing dashboard created by the World Bank.

The first phase of the tax runs through December 2022, with a tax rate of 120 rand ($8.34) per ton of carbon dioxide equivalent. It is to rise annually at a rate of two percent above inflation.

Allowable tax breaks will reduce the effective rate to between 6 rand and 48 rand per ton, the National Treasury said in a statement after the tax was signed into law by President Cyril Ramaphosa.

“A review of the impact of the tax will be conducted before the second phase and will take into account the progress made to reduce GHG (greenhouse gas) emissions in line with our National Determined Contribution,” the National Treasury said. The second phase will run from 2023 to 2030.

The tax had a lot of trouble getting out of the starting gate. It was to have begun in 2010 but was postponed at least three times after mining companies, steelmakers and the state-owned power utility Eskom said it would erode profit and push up electricity prices.

And at its current level, the tax is taking hits from local and overseas climate activists. They say that the tax is too low to achieve the emissions targets the country signed up for in the 2015 Paris Agreement. The tax is considered “highly insufficient” by the Climate Action Tracker, an independent scientific analysis produced by three research organizations tracking climate action since 2009. CAT monitors 32 nations, which produce about 80 percent of the world’s emissions.

But Aljazeera called the tax “a rare step for an emerging economy.” South Africa, which relies largely on coal for its energy supply, is the 14th-largest polluter in the world and the largest in Africa, according to Greenpeace.

"We definitely welcome this. It is very, very overdue," said Melisse Steele, senior campaign manager at Greenpeace. "It is a major step, but Greenpeace has expressed our concern that we don't think that the carbon tax will be effective enough, and the tax level is inadequate."

South Africa’s move comes two months after Canada moved ahead with its carbon pricing plan. The federal government extended its carbon-pricing program nationwide by imposing a tax on fossil fuels in four provinces that had declined to write their own climate plans.

Canada currently has one of the most ambitious carbon pricing programs in the world, The New York Times reported. Under Prime Minister Justin Trudeau, the Liberal government has enacted a nationwide tax on oil, coal and gas that starts at $15 per ton of carbon dioxide this year and will rise to $38 per ton by 2022. Most of the revenue will be refunded to Canadians on their tax bills; the government estimates that these refunds will offset higher energy costs for about 70 percent of people.

Individual provinces can opt out of the federal program by designing their own local climate policies. British Columbia, for instance, has its own higher carbon tax in place, which rose to $30 per ton this year, and Quebec has enacted a local cap-and-trade system. But four provinces, including Ontario, refused to create their own plans, and the federal tax went into effect in those places on April 1.

The Times has called Britain's carbon tax "perhaps the clearest example in the world of a carbon tax leading to a significant cut in emissions." The European Union has already implemented a cap-and-trade system, but Britain tacked on its own price floor for carbon, which The Times said “essentially functions as a carbon tax of around $25 per ton.” The policy has helped to drive greenhouse gas emissions in Britain to their lowest level since 1890.

It’s time for our own country to start competing with these nations.