The economic benefits of tackling climate change

Last week I wrote about the health benefits of ditching fossil fuels for carbon neutral fuels but now I want to highlight the economic benefits of doing so.

A University of Massachusetts publication – The Economic Benefits of Investing in Clean Energy –  finds that investment in clean energy creates about three times as many jobs as the same amount of investment in fossil fuels. They write:

These job gains would be enough—on their own—to reduce the unemployment rate in today’s economy by about one full percentage point, to 8.4 percent from current 9.4-percent levels—even after taking into full account the inevitable job losses in conventional fossil fuel sectors of the U.S. economy as they contract.

According to economist Paul Krugman, the main economic problem facing the US at the moment is not lack of productive capacity, but lack of demand. Investment in clean energy is exactly what the economy needs. He writes in the New York Times, Invest, Divest and Prosper,

How would forcing the power industry to clean up its act worsen this situation? It wouldn’t, because neither costs nor lack of capacity are constraining the economy right now.

And, as I’ve already suggested, environmental action could actually have a positive effect. Suppose that electric utilities, in order to meet the new rules, decide to close some existing power plants and invest in new, lower-emission capacity. Well, that’s an increase in spending, and more spending is exactly what our economy needs.

And it’s not just economists who think clean energy investment is a good thing. American power companies appear to be welcoming of the new climate policies. An article in the Huffington Post last week quotes NRG Energy CEO, David Crane,

We welcome the renewed focus on climate change in Washington. We look forward to working with the EPA to create pragmatic and effective regulations that bring both the economic and environmental benefits of the clean energy economy to the American public.

I think that for someone who is business minded, climate change presents lots of exciting opportunities. Richard Branson certainly thinks so. He created the Carbon War Room to spearhead entrepreneurial solutions to reduce carbon emissions.  He is quoted in an article from the Huffington Post, Climage change: good for business?,

The good news is that creating businesses that will power our growth, and reduce our carbon output while protecting resources is also the greatest wealth-generating opportunity of our generation.

It seems to me that the fossil fuel industry is our present day blacksmith and there is less and less reason for us to prop it up, unless of course, you are in the direct employ of or own shares in this industry.