The decoupling of carbon pollution and economic growth in the United States is underway, and recent data from the International Energy Agency suggests that this trend is going global, as emissions have stayed flat in 2014 and 2015 while the global economy grew. When the Paris Agreement took effect in December 2015, the world took an important step toward avoiding the most dangerous impacts of climate change.  But Paris alone is not enough to avoid average global surface temperature increases that climate scientists say are very risky -- additional policies that reduce CO2 emissions are needed, in the United States and elsewhere, to ensure that these damages are avoided.   

Moreover, as we consider the interaction of climate change mitigation policies and the economy, it is important to remember that the counterfactual to serious mitigation is not free – the absence (or even delay of effective climate policy can be very costly over time. The figure below graphs estimates of the annual economic damages from climate change, expressed as a fraction of global gross domestic product (GDP), from mid- to late-century, under different climate policy scenarios. We can think of this as a “climate damage cost” that world nations will pay each year as the climate changes, in terms of lost economic output. This cost includes impacts of increased temperature on agricultural productivity, sea level rise, and deaths and illnesses related to heat, pollution and tropical diseases. In the reference curve (in blue), no action is taken to address climate change. Each of the other curves incorporate different assumptions about how much emissions mitigation the world will achieve, and how quickly.  If countries meet their individual nationally-determined contributions (INDCs) agreed to in Paris and go no further, moving the world from the blue to the purple curve, we can avoid significant economic damages. To move to the red curve, countries must meet the Paris INDCs and continue to decarbonize beyond 2030 at about the same rate represented in the INDCs.  If we achieve net-zero global GHG emissions in 2080, we can reduce climate damage impacts on the level of global GDP from more than 4 percent to less than 1 percent by 2100.

Failing to make investments in climate change mitigation could leave the global economy, and the U.S. economy, worse off in the future.  And the estimates graphed above are uncertain and may be conservative; they do not account for damages that are difficult to monetize (such as increases in the frequency and intensity of extreme weather), or for the possibility that we may cross critical greenhouse gas concentration thresholds that cause catastrophic damages (such as the melting of Greenland ice sheets and associated sea-level rise), or for the chance that climate change will reduce the rate of economic growth in some countries, rather than just the level of output.

We may have become used to reading about the predicted physical impacts of climate change, like inundated coasts and lower crop production. But the economic impacts, and their fiscal consequences, will be severe, as well.  For example, the U.S. Office of Management and Budget recently estimated that a reduction in annual global economic output of 4 percent—well within the range of what economic models suggest could happen by 2100 without further climate action—could translate to lost U.S. federal tax revenue of $340 to $690 billion per year (about 0.5 percent of expected U.S. GDP in 2100).

In deciding how much to reduce carbon pollution, and how quickly to act, countries must weigh the costs of policy action against estimates of avoided climate damages. But we should be clear-eyed about the fact that effective action is possible, and that the economic and fiscal costs of inaction are steep. 

For all the challenges and threats we face as a nation—from terrorist groups like ISIL and al Qaeda to increasingly sophisticated cyber attacks, from diseases like Ebola and Zika to Russian aggression in Ukraine—no threat is more terrifying in its global reach or more potentially destructive and destabilizing than climate change. The Department of Defense calls it a “threat multiplier.” The Department of Homeland Security considers it a major homeland security risk.  As President Obama said in China, “the growing threat of climate change could define the contours of this century more dramatically than any other challenge.”

That’s why, today, President Obama took another major step to address the threat of climate change by signing a Presidential Memorandum requiring the federal government to fully consider the impacts of climate change in the development and implementation of all national security policies and plans. First, the President’s memorandum directs 20 agencies from across the government to establish a dedicated working group to identify the U.S. national security priorities related to climate change. Second, it instructs these agencies to develop a Climate Change and National Security Action Plan outlining how they’ll develop and share information on these risks. Third, it directs each agency to develop strategies to address climate-related threats, from impacts on our economy to our food security to the flow of migrants and refugees. The system this memorandum puts into place will ensure that data and insights from climate science become a meaningful component of national security policymaking.  

The President’s memorandum is supported by a National Intelligence Council report, also released today, which finds that climate change is already having significant impacts—and that these are “likely to pose significant national security challenges for the United States over the next two decades,” including straining our military operations and bases.  

Already, we’ve witnessed the instability and harm caused by rising sea levels, dramatic flooding, regional droughts, extreme heat, and severe weather events in many parts of the world. A devastating drought contributed to the early unrest and eventual conflict in Syria, as water shortages and crop failures led farmers to abandon their homes in search of more stable sources of food and water. More than 100 million people now live less than one meter above sea level, and the expected pace of sea level rise means that these people will be at increasing risk during this century. In the Arctic, melting sea ice is increasing the potential for international tension as competition for the region’s vast natural resources grows. That’s why the Administration proposed in 2015 to accelerate the acquisition of a replacement heavy icebreaker for the Arctic and began planning for the construction of additional icebreakers. And this year, the Administration requested $150 million from Congress to accelerate production of a new Polar Icebreaker, and the Administration continues to call on Congress to provide this critical funding to the U.S. Coast Guard this year. 

The report found that, around the world, climate change will only continue to threaten the stability of countries, heighten social and political tensions, increase health risks, jeopardize food security, and negatively impact economic growth. These effects will be especially pronounced as populations continue to concentrate in coastal areas, drought-prone regions, and other vulnerable areas. 

Given the scale of this threat, it’s imperative that policymakers have clear and accurate information and assessments to weigh how the impacts of climate change will affect our national security. Just as we work to defeat any adversary before they have the ability to attack, we must similarly prepare for and mitigate the impacts of climate change. The security of our nation—and the well-being of our world—depends on it. 

This work complements another set of initiatives on reducing methane and black carbon emissions, and further advancing clean transportation.  Notably, all three countries are also taking important cross-cuttings steps, including aligning methods for estimating the social cost of carbon and completing comprehensive Midcentury Strategies for driving down greenhouse gas emissions.

These efforts will not only reduce the impacts of climate change and help all three countries meet their commitments under the Paris agreement, but they will also provide important benefits for the economy as a whole and support hundreds of thousands of jobs.

Real Economic Benefits from the 50 Percent Clean Energy Target

A starting point for thinking about the economic benefits is to consider what would happen if we do not take action to reduce carbon emissions. 

The White House Council of Economic Advisers has estimated that if a delay in cutting carbon emissions causes the mean global temperature to stabilize at 3 degrees Celsius above preindustrial levels instead of 2 degrees, that delay will induce annual additional economic damages of approximately 0.9 percent of global output and impose dangerous economic and security risks that are hard to fully quantify. Now, 0.9 percent of output in the United States alone in 2015 was over $160 billion. And these costs would not just happen once—they would be faced year after year. 

But looking at the costs of inaction is only the beginning of considering the benefits. A quickly growing clean energy sector will bring additional benefits by spurring innovation and growing employment in these industries.

In fact, we project that jobs supported by the clean energy (hydro and non-hydro renewables and nuclear), energy efficiency, and new transmission sectors of the economy will continue to rapidly grow: from under 700,000 today to over one million jobs supported on average through 2025.

Relevant Trends in Clean Energy Making the Target Possible

A dramatic transformation of our energy system is underway, which will help all three countries meet the new clean energy target. Deployment of clean energy is growing at an unprecedented pace and the cost of new technologies is plummeting. The share of the share of non-hydropower renewables has increased from roughly 3 percent in 2008 to 7.3 percent in 2015. Wind and solar energy alone currently make up over 5 percent of generation and were less than 1.5 percent in 2008. This growth is expected to continue apace, with the U.S. Energy Information Administration (EIA) projecting wind and solar generation to nearly double by 2025 under business as usual.

But wind and solar are only part of the story. With nuclear and hydro and non-hydro renewable energy, clean energy is already providing roughly 35 percent of electricity generation, and by 2025 EIA projects 43 percent clean power generation under their reference case. Energy efficiency is growing as well, reducing our demand for energy. Since 2008, utility spending on energy efficiency, which saves households money by cutting energy use, has grown from just over $5 billion to over $8 billion in 2015. Reducing energy demand will make it easier for clean energy to provide a larger share of our energy needs.

These large increases in deployment come amid notable cost declines. Since 2008 the cost of onshore wind has declined over 30 percent and solar over 70 percent. LED lighting has seen a nearly 90 percent decrease in cost per kilo lumen since 2008. The cost of Li-ion battery packs for electric vehicles have fallen from above $1,000/kWh in 2007 to under $410/kWh in 2014, with some estimates coming in as low as $300/kWh. A recent report by the White House Council of Economic Advisers has shown that innovations in energy storage—and smart markets that allow for electricity demand to respond to energy prices—provide an opportunity to ease the integration onto the electric grid of increasing quantities of renewable energy resources. These innovations can complement greater transmission interconnection to provide a more resilient grid that can incorporate geographically dispersed clean energy generation across North America.

This all means that we are on a road towards a cleaner energy future, driven in part by initiatives already underway. Cooperation across North America will further accelerate this trend. If we project the current trends to reach the 50 percent North American target, we will see American clean energy growing to nearly 1,900 billion kWh of generation by 2025. Moreover, energy efficiency is also projected to grow, reducing the total generation demanded and contributing to reaching the 50 percent target across the three countries.

The 50 percent clean energy target across North America will bring us closer to our neighbors, help reduce the harmful impacts of climate change, and have clear economic benefits for American households.

The more work we did on this issue, the clearer it became that making buildings, plants and homes more energy efficient was a triple win — a win for jobs and economic growth; a win for businesses’ operating costs and bottom lines; and a win for our effort to reduce carbon emissions and fight climate change.

Cutting energy waste was a common sense solution when President Obama launched the Better Buildings program in 2011 — with the goal of improving the energy use of our nation’s commercial, industrial, residential, and public buildings by 20 percent over 10 years — and it still is. In fact, four years later, we have made tremendous progress.

• We are on track to meet our energy savings goal. Leaders from schools, universities, hospitals, industry, cities, towns, commercial real estate, hotels, food service — across tens of thousands of buildings — are reducing energy consumption by more than 2 percent per year — right on target for 20 percent.
• More than $10 billion has been committed to greater efficiency, with more than $4.5 billion invested in projects and $840 million saved since the program launched.
• The number of Better Buildings Challenge partners has grown to more than 250 public and private organizations representing more than 3.5 billion square feet, 650 manufacturing plants, $5.5 billion in financing investments and one hundred multifamily housing partners.
• Partners have avoided 5.8 million metric tons of carbon emissions — doing their part in the fight against climate change.

But there is still more work to do. That is why, earlier today, I announced that we are expanding the Better Buildings Challenge to include water savings. In buildings, water and energy use are often integrally linked. Using water more efficiently results in lower operating costs, a more reliable water supply, and improved water quality. It also takes energy to treat and transport water, so cutting water use saves energy.

Moving forward, DOE will be working with interested partners in the Better Buildings Challenge to make a water savings commitment that is aggressive for their own organization, including advancing data collection and analysis practices and sharing more solutions to common water-saving barriers. At a time when concerns about drought are at the forefront, it is important that we continue to look for innovative solutions like this one, while also staying true to what we know works.

That is why I also challenged each of the current Better Buildings partners to double the impact they are having and, in the next year, each recruit another organization to set the same aggressive goal of 20 percent energy savings — or more. That is what President Obama’s efforts to reduce carbon emissions and fight climate change is all about — the idea that each of us, nations, local governments, business and families must play our part to take on this global challenge and reject the false notion that we must choose between protecting our planet and growing our economy.

More information about Better Buildings, including the new announcements made at the Better Building Summit, is available in "Better Buildings: 2015 Progress Report" here.

Today, the American Thoracic Society (ATS) will hit the halls of Congress to educate our representatives about a new survey of more than 900 ATS members, which found the majority of doctors believe climate change is already negatively affecting the health of their patients. In fact, 77 percent of respondents reported that increases in air pollution due to climate change are worsening the severity of illnesses in their patients, and they expect these health impacts will further increase in the future.

ATS members also indicated that their patients are experiencing other climate-related health problems — including injuries due to severe weather, allergic reactions, and heat-related impacts. These findings are in line with the results of a survey of the National Medical Association’s members last year, which also found that the sick, elderly, and people living below the poverty line will be disproportionately impacted by climate change. 

Already, 1 in 10 children in the U.S. suffers from asthma. Heat-related health problems are growing. Pollen concentrations are up. Rising temperatures are only going to bring more smog, more asthma, and longer allergy seasons that put more Americans at greater risk of landing in the hospital.

As the evidence shows us, we can’t stand on the sidelines and be the first generation to fail at that most basic human instinct — to leave our children a safer, more prosperous world. 

That is why we are so committed to executing the President’s Climate Action Plan.

To learn more about how the Obama administration is acting on climate, visit WhiteHouse.gov/climate-change.

In the President's State of the Union address, he laid out his vision for Middle-Class Economics -- the theory that we can continue the progress we have made by promoting policies that build the economy from the middle out. In the run-up to the State of the Union and since, he has outlined specific proposals to achieve that goal -- in housing, jobs, education, to name a few.

The President's emphasis on Middle-Class Economics has begun to work -- delivering concrete benefits to families across the country and driving the policy debate in Washington as well. Over the next several weeks, the President will keep his foot on the gas by bringing forward new, concrete actions to strengthen the economic standing of working- and middle-class families.

This starts today, with the President announcing a new executive action to help more hardworking Americans save for retirement by cracking down on hidden fees that hurt consumers and back-door payments that help Wall Street brokers. Speaking at the AARP, the President will be joined by champions of consumer rights issues, including Senator Elizabeth Warren and Richard Cordray, Director of the Consumer Financial Protection Bureau, to announce this new move.

And that's just the beginning. Over the next several weeks, the President will announce new steps to protect consumers, make college more affordable, and help boost the wages of working and middle-class families trying to make ends meet.

These steps -- which will have a real, tangible impact on millions of working- and middle-class Americans -- come at a time when Republicans in Congress are pushing the same failed trickle-down economic policies that led to the worst economic crisis since the Great Depression.

In the first few weeks of the new Congress, they've voted yet again to repeal the Affordable Care Act, they've voted to cut education investments, and they've voted to weaken financial reform, while doing nothing to expand opportunity to working- and middle-class families.

So as Republicans prepare to release their budget, we will make the choice between Middle-Class Economics and trickle-down economics clear. If Republicans pull a page from the same failed playbook of cutting taxes for millionaires and billionaires while slashing investments in education and job training, we will move with even more resolve to demonstrate how Middle-Class Economics is working, and can help even more Americans.

So stay tuned for new ways we will continue to move our country forward and make sure that more Americans who work hard and play by the rules can get ahead.

Thanks,

Brian

We have to keep at it — because promoting clean energy innovation will help grow the economy while taking decisive action on climate change. 

That is why, today, I was proud to announce a new Clean Energy Investment Initiative at the Department of Energy ARPA-E Summit. Through the Initiative, the Administration seeks to catalyze $2 billion of expanded private-sector investment in solutions to climate change, including innovative technologies with breakthrough potential to reduce carbon pollution. By leveraging the tools and capabilities of the federal government, this new Initiative will increase investment in clean energy technologies.

Further clean energy innovation to improve the cost, performance, and scalability of low-carbon energy technologies will be critical to taking action against climate change. Foundations and institutional investors have the potential to play an important role in accelerating our transition to a low-carbon economy and cutting carbon pollution.  

Today’s announcement comes with commitments from the University of California Board of Regents, the William and Flora Hewlett Foundation, and the Schmidt Family Foundation to connect investors with clean energy solutions. Taking just one example, the University of California Board of Regents will build on its commitment to allocate at least $1 billion of its endowment and pension over five years for investments in solutions to climate change.

To build on these initial commitments, the White House will host a Clean Energy Investment Summit later this spring. The Summit will bring together foundations and mission-driven institutional investors to discuss ways to scale up investment in clean energy innovation. The Department of Energy (DOE) will also help catalyze philanthropic activity through the Initiative by leading an effort to identify opportunities to leverage its world-class technical expertise, technologies, and programs to assist in understanding the opportunities and needs to transition to a clean energy economy.

In the State of the Union, President Obama said he wanted Americans to win the race for the discoveries that unleash new jobs in industries of the future. The Clean Energy Investment Initiative announced today brings us one step closer to realizing this goal, while spurring investment in technologies to cut carbon pollution and creating a more secure and affordable energy future. 

Brian Deese is the Deputy Director of the Office of Management and Budget.

Learn more:

• FACT SHEET: Obama Administration Announces Initiative to Scale Up Investment in Clean Energy Innovation

It’s worth taking this moment to look back at the distance the economy has come since 2009, and the work left to do to build a more durable economy for the future. When it comes to managing our nation’s finances, we face a very different picture than we did five years ago. As the chart below shows, under the President’s leadership, the deficit has been cut by more than half as a share of the economy, representing the most rapid sustained deficit reduction since World War II.

The rapid reduction in annual deficits has been driven in part by a historic slowdown in health care cost growth, with health care prices rising at the slowest rate in 50 years. These recent trends and passage of the Affordable Care Act (ACA) have improved our long-term fiscal outlook, reflected in the extended solvency of the Medicare Hospital Insurance Trust Fund and the reduction in projected Medicare and Medicaid spending. As the chart above shows, projected baseline Medicare and Medicaid spending in 2019 – just one year alone – has fallen by $261 billion, and over a decade (from 2011-2020) it has fallen by more than $1 trillion. The ACA is contributing to this slowdown by reducing Medicare overpayments to private insurers and medical providers and implementing reforms that improve quality of care and reduce hospital readmission rates. And these budgetary savings are being achieved while the ACA is expanding access to quality health care to more than 10 million Americans.

But as the President made clear today, we have more work to do. We have an opportunity now to build on the progress we’ve made in putting our fiscal house in order and recovering from the worst economic downturn since the Great Depression, by putting an end to mindless austerity and manufactured fiscal crises. Instead, we can work together to make the investments we need to grow our economy, increase opportunity, and enhance our national security, while continuing to put in place reforms that will improve our long-term fiscal position. 

Brian Deese is the Deputy Director at the Office of Management and Budget.

They recently put together a new mortgage disclosure form that spells out – in simple terms – how much you’re going to owe on your home. No more hiding things in fine print.
 
And they’ve set up a new website that makes it easier than ever for you to report on a whole range of financial abuse.  If you’re applying for a credit card, opening a bank account, or trying to get a student loan and something doesn’t seem right, go to www.consumerfinance.gov/complaints and let them know.  Not only will they bring your complaint directly to the company in question, they’ll give you a tracking number so that you can check back and see exactly what’s being done on your behalf.
 
That’s what Wall Street reform is all about – looking out for hardworking Americans by making sure everyone plays by the same rules.  We’ve come too far to go back to an era of top-down, on-your-own economics. Now is the time to move forward; to strengthen the middle class; and to rebuild an economy where everyone can have the confidence that if they work hard, they can get ahead.  

Learn more about the Dodd-Frank Wall Street Reform and Consumer Protection Act.
 
 

Today, Brian Deese, Deputy Director of the National Economic Council, is holding a session of Office Hours on Twitter to answer your questions. At 4:00 p.m. EDT, he’ll be on the @WHLive account to answer questions on why we can’t wait for Congress to act and a series of executive actions to put pressure on Congress, including steps to make it easier for homeowners to refinance their mortgages.

Here’s how White House Office Hours work:

• Ask your questions now and during the live event on Twitter with the hashtag #WHChat
• Follow the Q&A through the @WHLive Twitter account
• If you miss the live session, the full session will be posted on WhiteHouse.gov and Storify.com/WhiteHouse

So, stop by for Office Hours at 4:00 p.m. EDT on Tuesday, October 25th with Brian Deese. We can’t wait to join the conversation. Be sure to follow @WhiteHouse on twitter for the latest news and more opportunities to engage.

During White House Office Hours, Deputy Director of the National Economic Council Brian Deese answers questions from the public on the American Jobs Act through Twitter. September 9, 2011 (Photo by Thomas Kelley)

Here’s what you missed during past Office Hours:

• Office Hours 10/21/11 or "Core Commitment of the President": Ben Rhodes Answers Your Questions on Twitter
• Office Hours 9/15/11 or "Carrier pigeon, have you considered it?": Jason Furman Answers Your Questions on Twitter
• Office Hours 9/14/11 or "Make Voices Heard": Stephanie Cutter Answers Your Questions on Twitter
• Office Hours 9/13/11 or "We Need the American Jobs Act Now": David Plouffe Answers Your Questions on Twitter
• Office Hours 9/9/11 or “Gotta sign off, headed to #WHTweetup”: Brian Deese Answers Your Questions on Twitter
• Office Hours 8/18/11 or "The Real Fix is the #DREAM Act": Cecilia Muñoz Answers Your Questions on Twitter
• Office Hours 8/3/11 or "Shoeless at Work": Office Hours with Brian Deese
• Office Hours 8/2/11 or "The American People Won In This #Compromise": Jason Furman Answers Your Questions on Twitter
• Office Hours 8/1/11 or "Important Win 4 Economy": Brian Deese Answers Your Questions on Twitter
• Office Hours 7/29/11 or "#Compromise": Jason Furman Answers Your Questions on Twitter
• Office Hours 7/29/11 or "Time Flies When You're Tweeting": Brian Deese Answers Your Questions on Twitter
• Office Hours 7/28/11 or "GREAT question": Brian Deese Answers Your Questions on Twitter
• Office Hours 7/28/1 or "My First Time Tweeting": Jason Furman Answers Your Questions on Twitter
• Office Hours 7/27/11 or "What is POTUS?": Brian Deese Answers Your Questions on Twitter
• Office Hours 7/26/11 or "Budget Wonks Unite": Brian Deese Answers Your Questions on Twitter

First, as Secretary Geithner highlighted in a visit to a UPS facility in Louisville, Kentucky on Monday, in addition to supporting good middle-class jobs, the investments in the American Jobs Act also create real economic value.  It helps pay for the cost of materials for rebuilding roads and bridges or modernizing schools. It provides tax cuts that go towards new investment by small businesses or new purchases by families. We can all agree that improving the quality of our schools and our infrastructure or providing small businesses with the incentives and resources to expand strengthens our economy and its competitiveness. Simply dividing the cost of the bill by an estimate of the number of jobs created ignores these economic benefits. In addition, these calculations focus on the jobs impact in one year alone, and evaluate it against the cost of the entire bill. While the package is designed so that there is the strongest boost in 2012, there is a job creation impact beyond then, which these calculations don't take into account.

What’s more, these calculations fail to take into account the impact of getting people back to work now. Helping Americans get back to work not only reduces the costs of publicly funded programs like Medicaid and food stamps, it also reduces the potentially significant long-term costs to the economy of having people out of work for extended periods.

The reason that numerous independent analysts have projected that the American Jobs Act would have a significant impact on both employment and economic growth in the coming years is because it includes a set of proposals that are cost-effective at promoting job creation. Indeed, many of the measures in the American Jobs Act – from tax cuts for hiring new workers to providing support to prevent teachers from being laid off – are among those that the independent Congressional Budget Office estimated would have the biggest “bang for the buck” in spurring growth and employment.  That is why one private-sector forecaster (Macroeconomic Advisers) concluded that the American Jobs Act was designed to be “timely, temporary, and targeted to areas of immediate need.” At the same time, the bill is fully paid for – ensuring that, as the economy strengthens, we take the steps we need to reduce our deficit and get our fiscal house in order.

We all agree that we need to do more than just recover from this economic crisis.  We need to rebuild the economy by jumpstarting growth in the short term and building a stronger foundation for the long term.  We can’t stand on the sidelines and simply hope for the best. That is why we need to work together and pass the American Jobs Act on behalf of our economy and the American people right away. 

There are two more sessions of White House Office Hours tomorrow -- check out the full schedule at WhiteHouse.gov/officehours and follow @WhiteHouse for the latest updates.

Brian Deese Brian Deese, Deputy Director of the National Economic Council, answers questions from the public on the ongoing deficit debate using the @WhiteHouse Twitter account as part of our new series, Office Hours July 28, 2011.