The $1 Trillion Carbon Cap GDP Boost

The consensus among economists these days is that the economic cost of curbing climate change in the short-term will run between 0.5 and one percent of U.S. GDP—about $143 billion if we use 2008’s GDP as a reference.

But Grist‘s Gar Lipow doesn’t think curbing climate change will cost the GDP a dime:

[T]here are some good reasons why the consensus is wrong about there being a net cost at all. I think the overwhelming evidence is that a climate-stable future will have a higher GDP, even before avoided climate disruption is counted.

Lipow thinks most economists have underestimated the benefits of capping enough carbon to stop climate change. He reasons that productivity will see a net 5 percent gain after enough buildings are greened, renewable resources replace fossil fuels, and workers begin reaping the health benefits of cleaner air and water.

Five percent of our current GDP is about $715 billion, but if projections hold, our GDP will hit $26 trillion by 2030, meaning total productivity gain would have to equal $1.3 trillion to fall in line with Lipow’s prediction.