By William S. Becker
Deep in the inner sanctums of the federal bureaucracy, Donald Trump’s lieutenants are writing the early drafts of the President’s State of the Union address, coming up on Jan. 29.
It’s possible that the annual speech will be overshadowed by a continuing government shutdown. But if it is like most of the others that presidents have delivered to Congress, Trump will brag about what he has done and explain what he wants to do next, in his case with fact-checkers scrambling to keep up.
Typically, the state of the economy is part of these speeches. This year Trump has some explaining to do about the role his trade war with China, criticism of the Fed, treatment of European allies, threats of nuclear war, statements about withdrawing from international institutions, chaos in the White House and the government shutdown have played in the crazy volatility of the stock market.
I would be uncomfortably outside my lane if I tried to explain what has happened to the economy, or what will. But there is evidence now that global climate change, usually categorized as an environmental issue, is a growing factor in the economy.
Last August, the Federal Reserve Bank of Richmond published an article that assessed the economic impact of just one of the many adverse effects of climate change: extreme temperatures.
“Despite long-standing assumptions that economic damage from rising global temperatures would be limited to the agricultural sector or developing economies,” the analysts reported, “(there is) evidence that higher summer temperatures hurt a variety of business sectors in the United States.”
The authors of the article were from several financial institutions. They cited evidence that summer heat waves and frigid winter temperatures slow the production of some industries and affect worker health and productivity. Some of the affected industries are finance, insurance and real estate, which make up half of national GDP. A state-by-state analysis, the authors said, shows that every one-degree rise in average summer temperatures decreases annual state economic growth by between 0.15% and 0.25%.
“Overall, these findings suggest that rising temperatures in the future could hamper economic growth in a variety of industries even in developed nations such as the United States,” they concluded.
If any further evidence is needed about the potential economic impacts of climate change, it’s the announcement by Pacific Gas and Electric in California that it will seek bankruptcy protection because it was found to be the cause of most of the major fires in the state in 2017. The utility faces $30 billion in liability claims. Heat and drought intensified by climate changes makes forests like those in California more susceptible to wildfires.
Findings like these, along with the obvious rising costs of today’s weather disasters, give lie to the argument that doing something about climate change is too expensive. Climate communications expert Susan Joy Hassol calls global warming “first and foremost an economic story”, and the story tells us that climate change is bad for our economy in ways that few have thought about.
Last year, Trump boasted that despite his rollback of President Obama’s Climate Action Plan, U.S. carbon emissions were falling. Trump was correct. They were. But he had nothing to do with it. Emissions had been declining since President Obama took office in 2008, at first because of the Great Recession and later because of Obama’s policies and market forces, with cheap natural gas replacing coal in many power plants. Now, under Trump’s watch, U.S. emissions are rising again.
Although he attended the last World Economic Forum (WEF), it’s likely that Trump did not read its Global Risks Report 2018. Reading is not something he does. The WEF concludes that extreme weather, natural disasters and the failure of climate change mitigation are three of the five biggest threats facing the world today. Only weapons of mass destruction ranked higher.
That is a very big elephant indeed. It will sit among the members of Congress, Trump’s Cabinet, the Supreme Court Justices and senior military officers while Trump speaks about the state of the union on Jan. 29, but the President of the United States will pretend it’s not there.