The Economic Benefits of CF&D�Impact on GDP: Good for the Economy!

Jerry Hinkle

CCL Economic Research Coordinator

March 22, 2021

About Our Speaker

Three Takeaways

Analysis of RNCT impacts: 1) GDP and 2) policy climate and health benefits are evaluated separately

Including climate and health benefits, impact of RNCT on GDP is positive shorter-term, strong positive longer-term

RNCT are clearly “good for the economy”! Not addressing climate would be devastating.

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Our Agenda

GDP Impact: No Policy Benefits

Climate, Health Benefits-Econ Only

GDP Impacts with Benefits

Summary and Questions

GDP Impact: No Policy Benefits

“...studies suggest roughly zero impacts on the overall growth of the U.S. economy.”

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Dr. Noah Kaufman, Director, Carbon Tax Research Initiative, Columbia University (Testimony to E&C, 12/5/2019)

GDP Impact: No Policy Benefits

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Source: EMF 32,

Overview (pg. 26)

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Policy Benefits

• Why then do economists support a carbon tax?
• Is GDP actually expected to decline?

NO!!

Climate and Health Benefits from the policy would enhance GDP!

Health Co-Benefits Improve GDP Immediately

Policy Reduces Air Pollution Substantially!

US Cases Prevented by a 2°C policy (EICDA):

• Premature Deaths - 90,000/yr
• Hospitalizations - 70,000/yr
• Adult Lost Work Days - 6 million/yr
• Estimated Value (economic and non-economic) $700 Billion/yr

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“…existing valuations indicate that many countries would experience substantial economic gains from co-benefits…” (IMF pg. 99)

Climate Benefits Greatly Improve GDP Over Time

“The more recent studies (for example, Burke, Hsiang, and Miguel 2015) point to much larger damages than previously estimated and are more in line with the substantial risks scientists have warned about.”… “However, even these estimates are likely to understate benefits from mitigating climate change as they imperfectly take account of—or do not incorporate—some of

the damages related to temperature increases, such as a higher frequency and severity of natural disasters, a rise in sea levels, and the risk of more catastrophic climate change.” (IMF, pg. 96)

Long-Term: GDP is Higher with a Carbon Tax

“Overall, world gross domestic product (GDP) could be up to 25 percent lower by 2100 due to these [climate] impacts.”

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G30 (Janet Yellen, Mark Carney Co-Chairs), October 2020

GDP Impacts With Policy Benefits

Actual GDP Impact in Europe�31 Countries/30 years

Good For The Economy/Society

The Largest Public Statement by Economists in History

• Broad Support for CFD Across Political Spectrum
• Price Carbon, Return all the Funds to Households

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RNCT Policy Impact on GDP

• If enormous climate and health benefits Not included, slight GDP impact.
• If just the economic component of health and climate benefits Are included, short-term GDP impact is positive and long-term GDP impact is a very strong positive.
• Policy Clearly is “Good for the Economy” and our health!
• Not addressing climate change will clobber the economy and our health.

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Questions?