Let’s Recognize The Enormous Economic Benefits of Global Warming

Financial FAQs

It should now be time to look at the future benefits that will come from the necessity to mitigate global warming, while the Paris climate change conference is in session. We already know the environmental havoc it has wreaked, with the greater frequency of flooding from rising oceans (e.g., via Hurricane Sandy), tornadoes, increased carbon emissions, and the like resulting in $billions in economic losses.

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Graph: NASA

But no one is looking yet at the benefits to economic growth increased investments will bring to prevent our Earth from overheating, investments that will be needed to mitigate the ongoing damage of rising seas, as well as fund future investments in new technologies that can reduce the increase warming science predicts.

Bill Gates has been one harbinger of these benefits, with his calls to spend more on future technologies. For instance, Gates has invested $1 billion of his own money into startups working on new kinds of batteries and nuclear reactors.

“Honestly, I’ve been a bit surprised that the climate talks historically haven’t had R.&D on the agenda in any way, shape or form,” Mr. Gates, 60, said in an interview last week on the sidelines of the summit meeting, which ends on Friday.

And Gates has just announced a multi-billion dollar, multi-national initiative “intended to forge a global accord to cut planet-warming emissions,” at the Paris conference, according to the New York Times.

“The fund, which one of the people described as the largest such effort in history, is meant to pay for research and development of new clean-energy technologies, says the Times article. “It will include contributions from other billionaires and philanthropies, as well as a commitment by the United States and other participating nations to double their budget for clean energy research and development, according to the people with knowledge of the plans, who asked not to be identified because they were not authorized to discuss the fund.”

China will be one of the major contributors to this fund, for good reason. Air pollution in Beijing on Tuesday reached “hazardous” levels, as rated by international municipal air quality standards, so that the government announced an almost complete shutdown of factories, schools, and auto traffic. This is the result of being the world’s largest user if coal-generated power.

And of immediate benefit to the U.S. economy was final Senate approval of a five-year, $305 billion highway bill Thursday that will refund the Highway Trust Fund. Its passing was spurred in part by the disastrous weather that has damaged our infrastructure, such as some 60,000 bridges badly in need of repair and replacement.

The bill calls for spending approximately $205 billion on highways and $48 billion on transit projects over the next five years. It also reauthorizes the charter of the controversial Export-Import Bank until 2019, which will boost U.S. exports for companies such as Boeing that require loan guarantees to sell its products overseas.

It was sent to President Obama with just one day to spare before the scheduled expiration of the nation’s road and transit spending. The measure passed by a 83-16 tally, hours after sailing through the House on a lopsided 359-65 vote. This bill will be a huge boost to many business sectors. For instance, it will create $13 billion in economic activity related to construction equipment and generate 4,000 jobs at equipment dealerships, according to a new study released by the Associated Equipment distributors.

The Washington, D.C.-based group said Wednesday the new $305 billion highway bill will stimulate approximately 6.4 cents in growth in the equipment industry for every dollar that is spending on infrastructure.

“The new analysis clearly illustrates what AED told lawmakers for almost a decade: restoring certainty to the federal highway program will yield positive economic benefits for equipment distributors, manufacturers and their employees,” AED President Brian McGuire said in a statement.

“After so many near misses and close calls, so many cans kicked down the road and so many cliffs narrowly averted, we finally have long-term, fully funded highway legislation,” Associated Equipment Distributors President Brian McGuire said in a statement about the measure, which is known as the Fixing America’s Surface Transportation (FAST) Act

The Pentagon has been one of the most vocal on the damage from climate change in a well-known report.

“Global climate change will have wide-ranging implications for U.S. national security interests over the foreseeable future because it will aggravate existing problems — such as poverty, social tensions, environmental degradation, ineffectual leadership, and weak political institutions — that threaten domestic stability in a number of countries,” said the Pentagon report.

This is only the tip of the iceberg on benefits of investments to mitigate global warming, needless to say. The $5 billion Tesla battery factory in Carson City, Nevada is just one example of the drive for sustainable energy sources that will power the Tesla electric car.

“This is great news for Nevada,” said Nevada Governor Brian Sandoval in the joint press release with Tesla Motors. Tesla will build the world’s largest and most advanced battery factory in Nevada which means nearly one hundred billion dollars in economic impact to the Silver State over the next twenty years. I am grateful that Elon Musk and Tesla saw the promise in Nevada.”

We can already see the benefits to growth when a $5billion investment is expected to produce nearly $100 billion in future benefits within just one state.

Harlan Green © 2015

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

About populareconomicsblog

Harlan Green is editor/publisher of PopularEconomics.com, and content provider of 3 weekly columns to various blogs--Popular Economics Weekly and The Huffington Post
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