Climate Action Means Economic Opportunity
Co-Chief External Affairs Officer, The Nature Conservancy
Like Chicken Little telling us the sky is falling, those opposed to acting on climate change warn of economic ruin if we take the actions needed stop pumping carbon pollution into the atmosphere. Eventually, reality caught up with Chicken Little and, thankfully, reality is starting to catch up with climate action critics.
Next week, leaders from around the world will gather in San Francisco, California for the Global Climate Action Summit (GCAS). They will use the gathering to turn a spotlight on climate solutions that create jobs, support economies and cut pollution—solutions, many of which are coming from the ground up, that are making a real impact for people and the planet.
On the eve of the GCAS, let’s consider the progress that the host state has made toward tackling climate change and what that could mean for the rest of the world. California is not only the U.S. state with the second largest share of national carbon emissions—it’s the fifth largest economy in the world, a little larger than the United Kingdom. In 2006, California committed in law to reduce its carbon dioxide emissions to below 1990 levels by 2020. After years of planning, first under Republican Governor Arnold Schwarzenegger and then under Democratic Governor Jerry Brown, a statewide plan to achieve this goal came into effect in 2012.
The centerpiece of California’s plan is a “cap-and-trade” system, whereby certain businesses are required to buy a permit if they release carbon pollution into the atmosphere, an approach targeted by climate action critics as economically ruinous.
So, how have things turned out in California? The sky didn’t fall, but have they been able to tackle climate change and sustain the economy?
The reality: from 2012 to 2016, the California economy grew by 14 percent, even while emissions dropped by 10 percent. During that period, California attracted USD 48 billion in clean investments, creating 500,000 new jobs. In 2016, Bloomberg named it the #1 state in which to start a new business.
Earlier this year, California announced it had met its 2020 pollution target two years ahead of schedule and then upped its ambition to a reduction of 40 percent below 1990 levels by 2030.
Examples of U.S. climate action alongside economic benefits is not limited to California. Ten states in New England adopted a cap and trade program for their power plants in 2005. Twenty-nine states have adopted requirements for the use of wind and solar energy, and 26 states have energy efficiency standards that require their utilities to offer programs such as home energy audits and rebates for efficient appliances that reduce power demand each year. These actions have generated economic opportunities—and sometimes reduced costs to consumers.
Leaders in other nations are coming to the same conclusion: in Mexico and Indonesia, regional governments have signed Green Growth Compacts that lay out plans to develop rural economies while simultaneously reducing carbon mitigations from the landscape sector.
Of course, climate action remains stalled at the federal level in the United States, with the Trump Administration dismantling policies put in place by the Obama Administration. Those rollbacks are proceeding even though the national economy continues to grow.
Yet there are some signs of hope. Recently, Carlos Curbelo, a Republican Congressman from Florida, put forward an idea for a carbon tax swap with the national gas tax, building on ideas for carbon pricing long advanced by many conservatives. The legislative proposal puts the focus on climate solutions that are good for the economy and the environment.
Meanwhile, reality has hit home for many of the world’s leading corporations, who now see climate action not as something to avoid but as a competitive advantage. One of corporate initiative that will get a lot of attention at the California summit is RE100. Founded by the Climate Group, IKEA and Swiss Re, the group consists of 140 companies that have pledged to get 100 percent of their electricity from renewable sources. Some of the most profitable companies in the world have pledged to meet the full 100 percent goal in the near-term, including Apple (2018), Bank of America (2020), Bloomberg (2025), Burberry (2022), Citi (2020), Coca-Cola (2020), eBay (2025), Goldman Sachs (2020), Google (2017), JP Morgan Chase (2020), LEGO (2017), Microsoft (2014), Prudential (2025), VISA (2019) and Wells Fargo (2020).
As we gather in California, The Nature Conservancy is coming with our own commitments to important next steps. The first item on our list is to use natural climate solutions—activities such as increasing forest cover, restoring wetlands, protecting grasslands, and managing agriculture and forest lands more effectively. Our most recent science indicates that natural climate solutions can remove 3-5 billion tons of carbon dioxide from the atmosphere each year at a cost of less than USD 10 per ton. At the high end, that equals U.S. fossil fuel emissions. And, crucially, there are economic opportunities to be had in pursuing natural climate solutions.
Every economy is different, of course—what works in California may not work elsewhere. But what California shows definitively is that climate action does not equal economic suicide. And highlighting this and other examples may be just the impetus we need to spark broader climate action, in the U.S. and around the world. Because in addition to turning a spotlight on how subnational climate action can benefit economies, the Global Climate Action Summit also provides an important opportunity to reflect on the very real impacts of climate change across the globe if we fail to act. It's time to lead the way in solutions.