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Watchdog Study: Cost of Climate Change to US Businesses in the Billions

A government watchdog agency says that unless the US government takes a more proactive position on climate change, the cost to the economy and to American businesses will continue to mount. The Government Accountability Office said this week that the federal government has spent $350 billion over the last decade on disaster assistance programs like wildfires, hurricanes and crop relief.

It said that those costs could be expected to grow at $35 billion a year to 2050. If anything is to be done, the report says, the government must manage the information it has and then “craft appropriate responses.” The GAO is a non-partisan group and its analysis is at the behest of two lawmakers — one from each party. Data was collected for the study from 2015 to the present.

“Climate change impacts are already costing the federal government money, and these costs will likely increase over time as the climate continues to change,” the GAO said“The impacts and costs of extreme events – such as floods, drought and other events – will increase in significance as what are considered rare events become more common and intense because of climate change.”

Companies such as Berkshire Hathaway Energy, Calpine Corp., Exelon Corp., General Electric, PG&E Corp., Royal Dutch Shell and Tesla are among those voicing support for the participation in global climate change talks.

Also, Alcoa, American Express, Apple, AT&T, Bank of America, Best Buy, BioGen, Cargill, CA Technologies and Coca Cola have all signed pledges to reduce their carbon footprints. As have WalMart, Target and CostCo. As for Coke, it says that it will cut the carbon footprint per drink by a quarter by 2020.

The Paris accord, of course, will try to keep global temperatures from rising more than 2 degrees Celsius by mid Century. It’s a voluntary pact that is non-binding from which President Trump has withdrawn. The Environmental Protection Agency also gave formal notice this month that it plans to repeal the Clean Power Plan, which the Obama administration promulgated to reduce CO2 emissions from power plants — a plan to require 32% cuts in CO2 emissions by 2032.

Nevertheless, the United States has been cutting its CO2 releases largely by switching from coal-to-natural gas-based electric generation as well as by using more renewables and implementing energy efficiency technologies. In 2016, CO2 emissions were 18% less than they were in 2005. Last year, CO2 releases dropped 5% for electric generators. Meantime, the country’s economy has been growing.

“Sustainability is what we do and what it is we are working on,” said Matt Pekar of United Technologies. “We will keep going.”

As it pertains to the GAO study, the watchdog said that the effects of climate change will be region specific. That is, the Southeast is more at risk of flooding as the result of hurricanes while the Midwest and Great Plains have greater chances of crop erosion. The West, meanwhile, is at risk for droughts.

The environmental movement along with the states supporting carbon reduction efforts say that they have every intention of stepping up to fill the role that the federal government should be playing. Moreover, they say that they have the law on their side.

For now, the biggest trump card held by environmentalists and the supportive states is the 2009 Endangerment Finding in which the US Supreme Court Okayed EPA’s right to regulate carbon dioxide as an emission under the Clean Air Act. When challenged, EPA ultimately had to provide its research and methodology to see how it arrived at its conclusion — that CO2 is a danger to human health and the environment.

And if the GAO study is right, CO2 is a danger to the US economy and to the federal treasury.

Will any of this change minds at the White House, the EPA or the Department of Interior? It’s unlikely to do so as the Trump administration has said its emphasis will be on reducing regulatory burdens and growing the economy. But as US businesses continue to find new ways to conduct commerce in cleaner ways, federal policy may take a back seat to free market forces.

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