Most of us can see the climate/weather changing. In a recent Deloitte survey, 60% of American respondents indicated they had experienced a severe climate/weather event in the past six months. Deloitte is the largest professional services network in the world and one of the Big Four accounting companies.
According to Deloitte’s January 2022 report entitled A Turning Point — A New Economic Climate in the United States, most economic models do not mention the impact of soaring costs of climate change on our economy. These outlays should be considered as financial choices are being made.
In 2021, there were 20 billion dollar weather incidents in the United States. In the past 50 years, weather events have cost us $1.4 trillion. If we do not respond sufficiently to the impending climate realities over the next 50 years and allow the temperature to increase by 3° C, the economic costs for the United States could skyrocket to $14.5 trillion.
Costs would increase because of sea level rise, damaged assets, increased disease rates, decreased tourism, and agricultural loss. Extreme heat, with its health effects, would also reduce productivity in areas of our economy that need a lot of workers. Over the next 50 years, nearly 900,000 job opportunities would also be lost annually.
Storms, flooding, fires, and other catastrophes would force business owners to make repairs to damaged assets and change infrastructures. Increasing climate/weather events would also disrupt supply chains around the world.
In individual terms, the $14.5 trillion loss due to allowing the temperature to rise to 3° C represents a $70,000.00 loss for every working American.
Deloitte estimates the annual cost to transition to a decarbonized economy would be $35 billion annually until 2050. This money would pay for the adverse effects of the conversion while including the gains made.
If the U.S. de-carbonizes, it could add $3 trillion in economic gain over the next 50 years and hold the temperature gain to 1.8° C by the end of the century. To accomplish this would require industries to convert into emissions-free entities. It would also require significant changes in energy, transportation, manufacturing, land use, and food/agricultural systems.
As well as a $3 trillion gain, the U.S. could add nearly a million more jobs by transitioning to a low-emissions economy. New types of jobs would be developed in clean energy areas, such as wind and solar energy, carbon capture, and green hydrogen. Significant efforts would need to be continued to retrain workers from high-emissions jobs to work in clean energy sectors.