It’s hard to wrap your head around the toll that climate change is taking on the economy. Last year, floods, wildfires, and other weather-related disasters cost the United States an eye-popping $400 million per day on average. Home insurance rates are skyrocketing as a result, and projections show that rising seas, drought, and heat could knock as much as 9 percent off the U.S. economy within 30 years.
As these realities sink in, a new story about climate change is beginning to crystallize: It’s a growing economic threat that’s already rattling our financial system.
“You know, we’ve talked about climate change in so many ways for so long, but we’ve talked about it as an environmental issue, or as a social issue,” said Bob Keefe, the executive director of the business group Environmental Entrepreneurs and a longtime tech journalist. “And of course, it is all of those things. But it’s also clear that climate change has become a huge economic issue.”
In the new book Climatenomics, Keefe argues that this dollars-and-cents reality is finally forcing the kind of meaningful change that decades of protests and warnings from scientists haven’t been able to. It’s an optimistic take. Sure, Congress has yet to pass any comprehensive climate legislation, but the Biden administration has still made some significant progress on goals to reduce emissions. And, though there’s no shortage of “greenwashing,” many companies that were a huge part of the problem in the past are beginning to make real strides.
Step by step, Keefe documents how the most polluting sectors of the economy are turning away from fossil fuels. Solar and wind are now the cheapest forms of energy available, and renewables represented 70 percent of the electricity added to the grid last year. (More than 3 million Americans now work in clean energy — three times the number of people employed in fossil fuels.) Automakers are clambering to produce enough electric vehicles to meet demand. Even heavy industry is investing in ways to make steel and cement without emitting all the carbon.
This turning point, however, has come at a strange time for the economy, with inflation soaring and experts warning that we might be heading for a recession. I chatted with Keefe over lunch in downtown Seattle to learn more about how climate change is wreaking economic havoc — and why he’s still optimistic about the future. This conversation has been condensed and edited for clarity.
Q. What does the climate have to do with the inflation and supply chain problems that we’re seeing right now?
A. I think climate change has contributed to our current economic problems a lot more than people think. Look at food costs. We all know our grocery bills are going up. Part of the reason is that when you lose crops to storms or drought or flooding, prices are going to go up. And right now everything from cornflakes to chicken is going up. Look at what just happened in Kansas, where more than 2,000 cows were found dead on the side of the road. There’s a video out there where you see 2,000 cows with their feet up in the air because of heat stroke.
I think part of the problem is nobody ever really thought about climate change as an economic issue until recently. People start to take action when they realize something’s a pocketbook issue. What I like to say is, “Look, I don’t care if you like polar bears. I don’t care if you believe in science. I don’t care if you drive a Prius or a pickup truck. The fact of the matter is, this is killing our economy. And we’ve got to do something about it.”
Q. So it’s less about getting people to agree on science and politics, and more about just doing the economically sensible thing?
A. Yeah, absolutely. You know, this isn’t something that’s happening just in red states or blue states. Globally, in 2020, six of the 10 biggest climate disasters were in the United States. You’re not going to be able to run away and hide from what’s happening.
Q. What do you think are the signs that people are finally paying attention to climate change?
A. Well, if you look at what almost every major corporation in America is doing right now, they’re shifting to renewable energy, beginning with Big Tech. Amazon, Facebook, and Google put data centers where they can get renewable energy. Why? Well, it’s the right thing to do. But I think, more importantly, to them, it’s the cheapest thing to do. When you’re one of the biggest users of electricity, you want to get it cheap.
Now, a lot of states around the country are trying to recruit these companies. These big companies aren’t going to go where they can’t get clean energy. So they start to change policies. I mean, there’s a reason that Facebook and Apple went to North Carolina and opened up data centers there. It’s because North Carolina has the only renewable portfolio standard in the Southeast. And it was, until recently, the number two state for solar. I’ve lived in a lot of places in the South, the sun doesn’t shine any brighter in North Carolina than it does in South Carolina or Georgia, and definitely not in Florida.
Business people aren’t going to go march with Greenpeace down Main Street. You know, they’re not going to climb a tree in the Pacific Northwest to save it, but they are going to push for change when it’s impacting their bottom lines. Now climate change is impacting all of their bottom lines.
Q. Your book touches on President Joe Biden’s election. How did that change the course of things?
A. President Biden, I think, for the first time made climate action an economic issue. We’ve never had a president that said, “When I think of climate change, I think of jobs.” So at the very least, it’s helped change the way people think about this issue.
The administration is really looking at it as a whole-of-government approach. The federal government is the biggest buyer of stuff in the world, including energy and vehicles. The president has said he wants to make all that clean. And so when the government starts to refocus its spending on clean energy and electric vehicles, that’s going to be good for the environment. It’s going to be good for the economy, and it’s also going to stimulate the market. That’s going to bring down prices and push state and local governments to follow along. Imagine having the biggest customer in the world that suddenly wants to go 100 percent clean energy and get clean vehicles. It’s a big deal.
Q. What do you make of the fact that Biden’s climate agenda hasn’t passed yet? It got pushback over inflation and government debt — both economic concerns. Do you think some politicians are hesitant to act because it hasn’t permeated their consciousness yet that climate change is an even bigger economic concern?
A. Oh, yeah, I think that’s absolutely right. But guess what, it’s going to permeate their consciousness when the next climate disaster hits their state. And it’s going to permeate their consciousness when they realize that the jobs of the future are going to other states instead of theirs. There are almost as many people that work in clean energy now in Republican congressional districts as working in Democratic districts. So that’s why I say that it shouldn’t be seen as a political thing.
Q. So how are you feeling about the future?
A. You know, I was talking to somebody the other day and they’re like, “Have you seen what’s happening with these wildfires? Have you seen this heatwave? Have you seen this flooding in Yellowstone? Why are you optimistic?” And the other thing I hear a lot is, “Yeah, Bob, this all sounds great, we all want electric vehicles, but it’s not going to happen soon enough to avert this disaster.”
I disagree. I remember sitting in Cupertino, California, with other journalists and Steve Jobs telling us, you know, “Someday you’re going to have a thousand songs on your phone, and someday you’re going to be able to take pictures with your cell phone.” And we’re like, “Oh, yeah, whatever.” I remember coming here to Seattle and talking to Bezos and him saying, when Amazon was just selling books, “Someday you’re going to be able to buy anything and everything off of my website, including dog food.” I was like, “OK, why the hell would I buy dog food off of a website?”
But look how quickly all those things have changed our world. Look how quickly business and technology and the economy has driven all of that, and the consumer adoption of all of that. I truly believe that we’re at the same point right now with clean energy, with clean vehicles, with energy efficiency.