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Here’s how severe the economic loss that the U.S. will experience from unchecked climate changes: Deloitte

Here’s how severe the economic loss that the U.S. will experience from unchecked climate changes: Deloitte

Here's how painful the economic loss will be for the U.S. from unchecked climate change: Deloitte

A commitment to climate action from Wall Street to Washington, and beyond, could bring the U.S. economy a $3 trillion boost over the next 50-year period to 2070. But it’s the toll of inaction that would cost the nation nearly five times that amount, a leading business consultancy says.

The Deloitte Economics Institute has released a new report that shows that the U.S. could grow by $3 trillion if it decarbonizes quickly, meaning it becomes less dependent on fossil fuels.

Instead, he advances technology for large-scale renewable energy.
Over the next 50 Years.

There will be a stinging period of economic transition, creating “winners” and “losers”, then a breakeven point, and finally a newly competitive economy, the researchers argue. This once-in-a-generation transformation could add nearly 1 million more jobs to the U.S. economy by 2070, according to the report, “The Turning Point: A new American economic climate.”

“The 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 U.S. “The analysis shows that the battle to slow climate change is not only an aspirational goal, but an economic imperative for the U.S.”

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Deloitte Economic Institute

The other side is eye-opening.

Over the past 50 years, the U.S. has suffered a total of $1.4 trillion in economic losses due to weather, climate and water hazards, and while pathways for the climate and economies are never linear, climate science and Deloitte’s analysis argue that an increase in global average temperatures could cost the U.S economy $14.5 trillion (in present-value terms) over the next 50 years.

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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 more difficult for people to live and work because of heat stress, rising sea level, damaged infrastructure, and reduced agricultural productivity.

A separate report from Aon, an insurance and business consultancy, this week showed that severe weather caused $329 billion in economic losses worldwide, including the deathly destructive Hurricane Ida and widespread flooding in Europe. Only 38% of the total was covered under insurance.

Deloitte’s analysis shows the 50-year loss of $14.5 trillion would slice 4% from gross domestic product (GDP), the broadest measure of the economy. This would translate into $1.5 trillion by 2070. Climate damage could result in the loss of nearly 900,000. 

‘If the U.S. chooses to adopt an ambitious, holistic path towards decarbonization it could see net economic gains by 2048.’

— Deloitte’s Scott Corwin

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The report outlines a scenario that includes four key stages for the U.S. Climate Transition:

  1. Between now and 2025 the public and private sector will make bold decisions in order to quickly transition towards renewable energy. This includes transforming the electricity value chains, such as storage, transmission, and transmission, which allows for parallel and synchronized advancements in the mobility, industrial, and food systems.

  2. The acceleration to net-zero will create major economic shifts in the policy, energy system, investment priorities, and consumer behavior between 2026 and 2040. 

  3. 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. With the increasing costs of sustainable technologies, greater net economic gains can be realized. 

  4. The U.S. Economy is radically changing and becoming more globally competitive in core sectors by 2050 and beyond The economy achieves net-zero emissions, operating in a world that keeps global warming to below 2°C.

“If the U.S. chooses to adopt an ambitious, holistic path towards decarbonization it could see net economic gains by 2048,” Scott Corwin, managing director in Deloitte U.S.’s ESG Strategic Growth Offering, summed up. “Every region of the country would benefit economically.”

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