The Federal Reserve Bank of Richmond recently released a working paper showing that climate change will inevitably slow the U.S. economy, and the states most heavily impacted will be those that went heavily for President Trump in the 2016 election – a president who has often argued against the reality of a warming planet.
Specifically, rising summertime temperatures in the hottest states will curb economic growth. And the states with the hottest summertime temperatures are all located in the South: Florida, Louisiana, Texas, Mississippi, Oklahoma, Alabama, Georgia, South Carolina, Arkansas, and Arizona. All of these states voted for Donald Trump in 2016.
This paper is consistent with a 2015 Nature study that found an optimal temperature range for economic activity. Economies thrive in regions with an average temperature of around 14°C (57°F). Developed countries like the US, Japan, and much of Europe happen to be near that ideal temperature, but continued global warming will shift their climates away from the sweet spot and slow economic growth. The question is, by how much?
If we meet the Paris Climate Agreement goal and stay below 2°C, the working paper concludes economic growth will slow about 5 to 10 percent. This is the best case scenario.
On our current path, including climate policies implemented to date (which would lead to 3–3.5°C global warming by 2100), US economic growth would slow by about 10 to 20%. In a higher carbon pollution scenario (4°C global warming by 2100), US economic growth would slow by about 12 to 25% due to hotter temperatures alone.
Despite evidence and predictions indicating Republicans are headed in the wrong direction when it comes to climate change, they are working hard to thwart initiatives that might help mitigate the effects of global warming.
One of those efforts relates to carbon tax proposals, which Republicans believe to be economically harmful.
House Majority Whip Steve Scalise, who represents Louisiana (the second-hottest state), recently introduced a new anti-carbon tax House Resolution. Scalise introduced similar Resolutions in 2013 with 155 co-sponsors (154 Republicans and 1 Democrat) and in 2015 with 82 co-sponsors (all Republicans). The latest version currently only has one co-sponsor, but more will undoubtedly sign on. All three versions of the Resolution include text claiming, “a carbon tax will lead to less economic growth.”
But is this necessarily the case? An argument can be made to the contrary:
Citizens’ Climate Lobby notes in its point-by-point response to the Scalise Resolution, an economic analysis of the group’s proposed revenue-neutral carbon tax policy found that it would modestly spur economic growth(increasing national GDP by $80 to 90bn per year). With this particular policy, 100% of the carbon tax revenue is returned equally to households, and for a majority of Americans, this more than offsets their increased costs. As a result, real disposable income rises, and Americans spend that money, spurring economic growth.
Failing to address climate change and slow the pace of global warming will lead America’s southern states toward economic difficulties as time goes on; however, a well-crafted carbon tax has the potential to provide a modest economic boost and work toward holding an inevitable economic slowdown at bay.
As The Guardian concludes:
Blind opposition to carbon taxes is simply bad for the economy and especially bad for Trump voters.
In short, if Trump, Scalise, and the rest of the Republican Party want to prevent slowed economic growth in red states, they should be trying to craft an optimal carbon tax, not blindly rejecting the idea outright.