A new US Treasury Department analysis highlights how policies to address climate change are promoting economic growth

A new US Treasury Department analysis highlights how policies to address climate change are promoting economic growth

The Bipartisan Inflation Reduction Act and Infrastructure Act would reduce emissions and pollution, stimulate adaptation, increase research and development, and reduce economic vulnerability.

WASHINGTON – Today, the US Treasury Department published an analysis of how the Low Inflation Act, the bipartisan infrastructure bill, and other federal policies to address climate change can boost economic growth.

The analysis by Assistant Secretary for Economic Policy (PDO) Eric Van Nostrand and Deputy Assistant Secretary for Climate and Energy Economics Eric Levinson describes how the PDO would boost growth by reducing greenhouse gas emissions, stimulating climate adaptation, and combating the pollution that often accompanies reduce global warming emissions, increase research and development, and reduce economic vulnerability to fluctuating international prices of fossil fuels.

“Reducing greenhouse gases mitigates the costly damage those emissions can cause — the most direct way climate policy benefits the economy,” Van Nostrand and Levinson wrote. “Some of these economic costs are obvious, such as the costs from more frequent and more powerful hurricanes, floods, and fires.” Others are more subtle but still harmful. Rising temperatures have been found to cause declines in students’ academic performance and future income, as well as reduced worker productivity, reducing economic potential throughout the economy. The Council of Economic Advisers and the U.S. Office of Management and Budget have summarized Twelve recent studies assess the total cost that climate damage will have on the U.S. economy. Collectively, they suggest that climate damage is already reducing U.S. GDP, and that the economic damage will accelerate as average global temperatures rise. So the Reducing greenhouse gases will provide economic benefits, especially if emissions reductions are part of a coordinated international effort such as the Paris Climate Agreement.

Keep going, “(c) Climate policies that promote clean energy may protect the economy from fluctuations in fossil fuel prices. In just the past three years, natural gas prices have quadrupled and then fallen by 50 percent, causing significant fluctuations in electricity prices. Prices have fluctuated Oil, which accounts for more than half the retail price of gasoline, went from less than $40 a barrel to more than $130… Renewable energy sources like wind and solar are not subject to this kind of price uncertainty. Once solar panels and wind turbines are installed, The fuel needed to operate them becomes costless. Businesses and households that heat or cook with electricity powered by renewable energy will not be subject to large price fluctuations. Electric vehicle drivers can rest assured that their transportation costs will not suddenly double. Thus creating a more stable energy system Flexibility may benefit all Americans by making the economy less vulnerable to price shocks that could lead to a recession.

The full text of the analysis is available here.

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