The Economic Case for Climate Action in the United States

Impacts on the United States economy growth

The United States economy has been adding $610 billion a year on average in the last decade, except for 2009 –a recession year38.

The impacts of weather events influenced by human-induced climate change and direct human health consequences of pollution from fossil fuel use are currently causing, on average, $240 billion a year in economic losses, damages and health costs –or about 40 percent of the current growth of the United States economy (Table 1). This amount equals 1.2 percent of the GDP. This is a conservative estimate because the sum does not include economic losses due to additional consequences of extreme weather events, such as decreased agricultural yields or health costs for premature deaths due to heat waves. This total is more than three times the amount spent for the Department of Education ($67 billion) or five times the amount for the Department of Homeland Security ($48 billion) for this year39.

These massive costs are being borne mainly by individuals, not the Government or the private sector. 

These economic losses and health costs are projected to continue to escalate due to the increasing number of weather events influenced by human-induced climate change and fossil fuel use.

Based on the rising trend in the last decade, and considering the current path, economic losses from weather events influenced by human-induced climate change could at least double in the next decade. Health costs caused by fossil fuel use could increase by at least 33 percent due to the current revocation of regulations, rules and policies to energy production40.

Thus, economic losses from weather events influenced by human-induced climate change and health costs caused by fossil fuel use could escalate to at least $360 billion a year or 50 percent of the economic growth in the next 10 years.

Some argue that rebuilding efforts after an extreme weather event boost economic growth. However, by continuing to rely on fossil fuels to generate energy and grow the economy, job creation in the United States will otherwise be focused on rebuilding and reconstructing what the increasing number of weather events will continue to damage and destroy.

The benefits of taking climate action outweigh the escalating economic losses and health damages.

WP Data Tables

Table 1: Summary of economic losses from weather events influenced by human-induced climate change and health costs caused by fossil fuel use in the United States (in $billion)

Economic growth, job creation and climate action

Many Americans still have doubts, conflicting views and opinions about climate change that are inconsistent with the overwhelming scientific evidence. Many believe that addressing climate change and transitioning to a low-carbon economy is incompatible with economic growth. Others, influenced by those with vested interests in the fossil fuel industry and climate deniers, continue to question the knowledge of reducing risks by taking action to avoid the worst impacts of climate change. For those whose highest priority is finding a job or a better job the impacts of climate change may be perceived as distant and intangible.

Contrary to these views, opinions and misperceptions, action to tackle climate change is, in fact, compatible with and essential for economic growth.

Economic growth and job creation –a priority for the current Administration for the next four years in America– require energy. Sustainable economic growth just requires generating energy differently. It also requires a more efficient use of energy in all sectors –residential, commercial, industrial and transportation.

Relying on fossil fuels for economic growth was how many economies grew in the 19th and 20th centuries. The key difference with today is that the consequences of burning fossil fuels were not known and understood more than a century ago; they were not appreciable then either. Today, however, they are. The evidence is undeniable: the more fossil fuels we burn, the faster the climate continues to change.

Clean and sustainable energy just requires smart decisions and smarter investments.

The United States can boost economic growth and create jobs, while taking climate action by:

1. Changing the energy equation

Carbon-free and sustainable energy can provide the additional energy needed to continue to grow the United States economy. It can also create jobs. Employment in the energy sector, currently employing 1.9 million workers41, can significantly increase through: 

Renewable Energy

Currently, about 10 percent of the energy (or 15 percent of electricity generation)42 used in the United States comes from renewables –solar, wind, bioenergy, hydropower and geothermal.

Half of the electricity generated by renewables is solely from solar and wind, or about 7 percent of the electricity used in the United States43. These technologies provide almost 500,000 jobs, including manufacturing, construction, project development, and operation and maintenance44. In particular, jobs in the solar industry grew 17 times faster than the overall job creation in the American economy45. In 2016, the solar workforce increased by 25 percent, accounting for 374,000 jobs or more than 40 percent of the employment in the generation of electricity in the United States46.

A major transition to renewable energy is required. Doubling the solar and wind generation capacity –an important first step— will create 500,000 new jobs. It will also provide sustainable clean electricity, only requiring an initial investment in installation but significant savings in the long-term due to low operating costs.

Most importantly, doubling the solar and wind generation capacity will reduce the share of electricity generation from fossil fuels (natural gas and coal) by 23 percent –from the current 65 to 50 percent47–a step in the right direction.

The expansion of these renewable technologies will, in turn, make their costs much more competitive and accessible, especially given that storage systems are now much more efficient.

Workers in the extraction of natural gas and coal in Illinois, Kentucky, Louisiana, Oklahoma, Pennsylvania, Texas, West Virginia and Wyoming can greatly benefit from these new jobs in renewable energy, with training and investments.


Electricity produced with nuclear power accounts for 9 percent of America’s energy (or 20 percent of electricity generation)48. Nuclear power provides carbon-free energy and is now safer.

There are 60 nuclear power plants in the United States, employing about 70,00049.  Two new nuclear reactors are planned for Georgia and an additional four are planned to be built in Florida, North Carolina, Virginia and Texas. These new plants could provide, at least, 10,000 new jobs in the generation of electricity.

Using fossil fuels responsibly

Fossil fuel power plants can be consistent with job creation and a low-carbon economy.

Currently, fossil fuel power plants generate about 65 percent of the electricity used in the United States50, contributing 39 percent of the United States CO2 emissions51. Natural gas and coal are the main sources of electricity generation, accounting for 34 and 30 percent respectively52.

The 200,000 workers53 employed by these fossil fuel power plants may feel threatened by the need to switch the generation of energy. However, carbon capture and storage (CCS) technologies would allow the continuing burning of fossil fuels to responsibly meet America’s energy needs. 

Of the 16 large-scale CCS plants in operation in the world, eight are in the United States. An additional CCS plant will be operational this year54, placing the United States at the top of technological innovation in using fossil fuels responsibly.

Power generation with CCS still requires more research and development for its large-scale deployment. More pilot programs will need to be implemented, since there are more than 1,000 electric power plants that burn fossil fuels in the United States (256 use coal and 816 use natural gas)55.

The research, construction and maintenance of CCS plants could double the current number of workers in energy construction, creating 250,000 additional jobs56, while securing jobs of those currently employed by fossil fuel power plants. 

The responsible use of fossil fuels also means that the social and environmental costs of burning coal, natural gas and oil should be incorporated into their price. For example, the price of electricity from coal without CCS would double to triple if the environmental and health costs would be accounted for57. This would, in turn, make the costs of renewables and non-carbon energy even more economically competitive, accelerating the transition away from fossil fuels.

Innovation and new technologies

New technologies to produce carbon-free energy will also have to be tested and deployed, such as locally produced advanced biofuels from forest and crop residues or municipal and construction waste, and biofuels derived from algae, with subsequent sequestration of CO2. In addition, strategic and forward-looking investments are already being made to identify and test reliable and affordable innovative sources of energy. 

Currently, about 300,000 jobs are focused on research, architecture, and engineering to support energy generation technologies58. An additional 50,000 jobs will accelerate the identification, testing and deployment of innovative technologies to produce sustainable clean energy.

Research continues to be developed and tested for the large-scale deployment of carbon-free energy. For example, fusion uses hydrogen to replicate the processes which power the sun. The technology has been researched for many decades and is still a long way from being commercially viable. If successful, it could provide a sustainable solution to electricity generation.

2. Using energy more efficiently

Reducing fossil fuel use will be easier and faster in some sectors of the economy than others. Thus, promoting energy efficiency is another key element of ensuring economic growth while taking climate action.

For example, a critical sector of the economy is transportation, which contributes 33 percent of the United States CO2 emissions59. Gasoline, diesel and jet fuel –all petroleum-based fuels— comprise 92 percent of the energy used in the transportation sector, and natural gas for another three percent60.

These fuels are used in 263 million cars, trucks, motorcycles; 6,676 aircrafts (passenger and cargo), 132,500 transit and commuter buses and rail cars; 397,500 freight trains and locomotives; 11.8 million recreational boats and 465 vessels (tankers, passenger and cargo ships) to transport individuals, passengers and goods throughout the United States61.

Using transportation more efficiently will ensure that traveling and trade meets needs and demands, while using less energy.

Electric cars powered by renewable energy sources (solar or wind) provide carbon-free transportation. Programs to provide consumers with financial incentives will make the transition faster and more accessible.

Other sectors that can greatly benefit from energy efficiency include:

   • 136 million homes and buildings where 324 million people in the United States live62.

   • Offices, hospitals, schools, police stations, places of worship, warehouses, hotels, shopping malls and industries (manufacturing, agriculture, and construction) where 160 million people in the United States work63.

3. Generating strategic investments

Transitioning to a low-carbon economy and increasing the efficient use of energy in all sector will require strategic investments. Much of the revenue for these investments could come from a carbon tax.

The aim of a carbon tax is to reduce emissions, promote a more efficient use of energy and encourage the transition away from fossil fuels.

The potential revenues from a tax on carbon emissions could be up to $200 billion in the United States within the next decade, according to models analyzed by the Intergovernmental Panel on Climate Change64.

A carbon tax will affect the cost of electricity from fossil fuel power plants as well as the price of gasoline. However, a carbon tax will promote a much more efficient use of energy and stimulate the transition to renewable energy technologies.


The opportunities ahead

The long-term economic benefits of ensuring economic growth and creating jobs while taking climate action outweigh the short-term costs and economic losses of delaying action to address climate change.     

Doubling or tripling the share of carbon-free energy, increasing the efficient use of energy in all sectors, and expanding fossil fuel power generation with CCS, along with a carbon tax, among other measures and policies to take climate action, will protect Americans from the escalating economic losses and costs due to the impacts of climate change.

The United States Federal Government should have embraced the opportunities to ensure economic growth and create jobs while taking climate action. Instead, it has made some decisions65, solely focused a short-term vision for economic growth and job creation, relying on an increased dependence on fossil fuels. Regulations, rules and policies that burden the development or use of domestically produced energy resources to the energy industry are being reviewed, revoked, suspended, revised or rescinded.

These regulations, rules and policies were intended to protect American lives, homes, businesses and livelihoods from the increasing impacts of climate change, by reducing emissions and pollution from fossil fuel power plants.

As the most influential country in the world, the United States should be leading the way in the 21st century global economy, by taking the path towards clean energy, sustained economic growth and job creation.

But as a result of these unfortunate and misinformed decisions by the Federal Government, the United States has become isolated from the rest of the rest of the world in the efforts to address climate change.

The consequences of these decisions may have left many Americans concerned. A simple risk analysis proves that it is in Americans best interest to take climate action.

There are, though, reasons for hope.

States, cities, businesses, universities and other organizations in the United States have joined forces to take climate action66. They recognize the economic opportunity that ensuring economic growth, creating jobs and promoting innovation represents through the transition to clean energy. Together, they represent about one-third of the population in America –more than 100 million people.

They understood the urgency of climate change and committed to taking climate action.

Each and every one of us can multiply and accelerate action to tackle climate change.

Actions we take every day where we live, where we work, where we study, how we travel, what we buy, how we build, even what we eat can contribute to climate action and make a difference.

Each and every one us is part of the problem. Each and every one of us is part of the solution.



38. U.S. Department of Commerce, Bureau of Economic Analysis
39. U.S Congress, Appropriations for Fiscal Year 2017
40. Executive Order on Promoting Energy Independence and Economic Growth, March, 2017 (
41. U.S. Department of Energy: U.S. Energy and Employment Report (2017)
42. U.S. Energy Information Administration
43. U.S. Energy Information Administration
44. U.S. Department of Energy: U.S. Energy and Employment Report (2017)
45. IRENA (2017), Renewable Energy and Jobs – Annual Review 2017, International Renewable Energy Agency, Abu Dhabi
46. U.S. Department of Energy: U.S. Energy and Employment Report (2017)
47. U.S. Energy Information Administration
48. U.S. Energy Information Administration
49. U.S. Department of Energy: U.S. Energy and Employment Report (2017)
50. U.S. Energy Information Administration
51. Second Biennial Report of the United States of America under the United Nations Framework Convention on Climate Change (2016)
52. U.S. Energy Information Administration
53. U.S. Department of Energy: U.S. Energy and Employment Report (2017)
54. Global Carbon Capture and Storage (CCS) Institute:
55. U.S. Energy Information Administration: Electric Power Industry Power Plants:
56. U.S. Department of Energy: U.S. Energy and Employment Report (2017)
57. Annals of the New York Academy of Sciences: Full cost accounting for the life cycle of coal, Paul R. Epstein et al, Center for Health and the Global Environment, Harvard Medical School (2011)
58. U.S. Department of Energy: U.S. Energy and Employment Report (2017)
59. Second Biennial Report of the United States of America under the United Nations Framework Convention on Climate Change, 2016
60. U.S. Energy Information Administration
61. U.S. Department of Transportation
62. U.S. Census Bureau
63. U.S. Census Bureau, U.S. Department of Labor, U.S. Energy Information Administration
64. Intergovernmental Panel on Climate Change, Fifth Assessment Report, Working Group III (Chapter 16)
65. Executive Order on Promoting Energy Independence and Economic Growth, March, 2017 ( and U.S. withdrawal from Paris Agreement, June 2017 (
66. Governors of 13 states in the U.S. Climate Alliance (with 10 additional governors pledging support), 19 State Attorneys Generals, 279 Mayors, more than 1,600 businesses and investors, and more than 300 universities:

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