The FINANCIAL — A new report released from the Deloitte Economics Institute shows that the United States economy could gain $3 trillion if it rapidly decarbonizes over the next 50 years. This once-in-a-generation transformation could add nearly 1 million more jobs to the US economy by 2070, according to the report, “The Turning Point: A new economic climate in the United States.”
“The Deloitte Economic Institute Turning Point report makes the case for another industrial revolution in the U.S.—one built on low-emissions growth—to avoid significant losses from the climate crisis and to create a more dynamic, prosperous economy for the U.S.,” said Alicia Rose, Deputy CEO for Deloitte US. “The analysis shows that the battle to slow climate change is not only an aspirational goal, but an economic imperative for the U.S.”
If global warming reaches around 3°C toward the century’s end, Deloitte’s analysis indicates that economic damages would grow and compound, affecting every industry and region in the country. This would make it harder for people to live and work due to heat stress, rising sea levels, damaged infrastructure and reduced agricultural productivity. Deloitte’s analysis shows that insufficient action on climate change could cost the U.S. economy $14.5 trillion in the next 50 years. A loss of this scale is equivalent to nearly 4% of GDP or $1.5 trillion in 2070 alone. And over the next 50 years, nearly 900,000 jobs could disappear each year due to climate damage.
“If the U.S. chooses to adopt an ambitious, holistic path towards decarbonization it could see net economic gains by 2048,” said Scott Corwin, Managing Director in Deloitte US’s ESG Strategic Growth Offering. “Every region of the country would benefit economically.”
Transitioning to a low-emissions economy would require the U.S. to accelerate investments in clean energy systems and a new mix of technologies that span across industries. New jobs would be created by the rapid expansion of manufacturing and private sector services. Other jobs—and entirely new kinds of work—would be created by expansion in clean energy sectors such as renewable energy and green hydrogen. And, according Deloitte’s research, the regions hardest hit by unchecked climate change would have the most to gain.
“The analysis demonstrates that we have a narrow window of time—the next decade—to make the bold decisions needed to change our climate trajectory and reach a turning point,” added Rose. “The decisions made by governments, businesses and communities would reinforce our early progress and could unlock extraordinary economic possibilities for the U.S.”
The report sets out a scenario with four key stages for the U.S. climate transition:
Between now and 2025, the public and private sectors make bold decisions to rapidly transition to renewable energy. This involves transforming the electricity value chain, such as storage and transmission, that enables parallel and synchronized advances in the mobility, industrial and food systems.
From 2026 to 2040, the acceleration to net-zero creates major economic shifts in policy, energy systems, investment priorities and consumer behavior.
From 2041 to 2050—which is the turning point where the benefits of transition outweigh the costs—decarbonization of high-emission industries is almost complete. The costs of sustainable technologies decrease, and wider net economic gains are realized.
In 2050 and beyond, the U.S. economy is radically transformed and is more globally competitive in core industries. The economy achieves net-zero emissions, operating in a world that keeps global warming to below 2°C.
The U.S. has the technology, capital, infrastructure and skilled labor needed to make this transition possible and at the least cost. As governments and industries invest in low-emissions growth, the U.S. economy could experience extraordinary gains in a single generation.
This study is part of a series of Deloitte reports that examine the economic impact of climate change in regions including Europe and Asia Pacific. Visit Deloitte’s Climate and Sustainability practice to learn more.