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Op-Ed | The American Prospect | November 4, 2024

The Climate Crisis Is a Cost-of-Living Crisis

2024 ElectionAnti-MonopolyClimate and EnvironmentEconomic Policy
The Climate Crisis Is a Cost-of-Living Crisis

The right’s climate denial means higher prices.

This article was originally published by The American Prospect.

Bewilderingly, Donald Trump is still perceived by a large chunk of the electorate as a relatively good economic policymaker, even though his proposed across-the-board tariffs and cruel mass deportation plan would dramatically increase the cost of living in the United States. (Voters don’t seem to penalize him either for his promise to preserve his highly unpopular 2017 tax cuts for corporations and the rich.) Indeed, companies are already planning price hikes to offset his global tariff scheme if he wins, making clear that U.S. consumers—not foreign countries—will be the ones who pay more. Moreover, if Trump follows through on his sadistic, fascist pledge to expel millions of immigrants, prices would soar even higher, as immigrants make up a huge fraction of both agricultural and construction laborers.

Yet it gets even worse: Trump’s hostility to climate action also threatens to saddle ordinary people with rising energy, food, and housing bills for years to come. Readers surely remember the quid pro quo offer that Trump made to fossil fuel executives gathered at his Mar-a-Lago palace back in May: Give him $1 billion and he’ll reverse Biden’s electric-vehicle and clean-energy policies, and gut a slew of environmental rules. As reported recently, Big Oil has dutifully readied a road map to undo Biden’s admittedly mixed climate legacy should Trump prevail. The upshot would be derailing the incipient American clean-energy transition, and even more fossil fuel expansion in a country that’s already the world’s top producer and exporter of oil and gas. Scientists have been unequivocal: New dirty-energy projects are incompatible with limiting temperature rise to 1.5 degrees Celsius—and damages grow exponentially with warming.

Even setting aside the devastating social and ecological consequences of climate change, Team Trump’s reactionary blueprint to fry the planet is sheer economic madness. Recent research found that the global macroeconomic damages from climate change are six times larger than previously estimated. According to the authors, “a 1°C increase in global temperature leads to a 12 percent decline in world GDP.” For context, the world has already warmed 1.3 degrees Celsius since the preindustrial era, and the United Nations warned recently that the world is currently on track for roughly 3 degrees of warming by 2100. A U.S.-focused study came to a similar conclusion: Under a high-emissions scenario, national GDP would shrink by 1 to 4 percent per year by century’s end.

A separate peer-reviewed paper projected that the world in 2049 will suffer $38 trillion in economic damages from climate change, based on likely policy pathways, with losses unjustly concentrated in poorer regions that have done the least to cause the crisis. According to this grim forecast, trillions of dollars in global annual income reductions are already locked in due to extant greenhouse gas emissions, and trillions more will come with every year that nations fail to zero out emissions.

A big way these economic damages will be felt is inflation. Climate disasters will damage or destroy land, factories, transportation networks, and so on—essentially, harming the economy’s supply of goods and services, leading to bidding wars over what remains. Therefore, the right’s opposition to climate action is objectively pro-inflation. The left and the center ought to communicate this point to voters as clearly as possible.

Senate Budget Committee Chairman Sheldon Whitehouse (D-RI), who is leading a joint investigation of Trump’s quid pro quo offer to Big Oil, has suggested some pithy language: “Republicans are corrupted by fossil fuel money, they’re lying to you about climate change, and you’re about to get an economic punch in the face because of it.”

What do these economic punches look like? For one thing, increasingly frequent and severe heat waves, wildfires, hurricanes, and floods are leading to ever more “billion-dollar” disasters each year. Those are economically ruinous for the direct victims, with pain dished out disproportionately to the poor and the nonwhite. But they also tend to lead to local shortages and price hikes.

More slow-moving disasters such as drought also jeopardize food security and wreak havoc on supply chains. A few days ago, barges started running aground in the Mississippi River due to a lack of rainfall, impeding U.S. farmers’ ability to deliver crops. Over the past year, an El Niño–linked drought has also slowed the passage of container ships through the Panama Canal, a critical node of global trade.

We may be a quarter-century away from living through some of the more horrific effects of our current warming trajectory, and yet climate change is already being experienced as a pocketbook issue—contributing to higher grocery bills, fueling a property insurance debacle that makes housing even more expensive while heralding far-reaching real estate devaluations and financial meltdowns, and more.

Disasters interact badly with global supply chains, left fragile by decades of neoliberalism and corporate concentration. This effect can be seen in the sellers’ inflation that began in 2021. Powerful firms exploited real and perceived supply issues stemming from multiple crises—including the COVID-19 pandemic, bird flu, and Russia’s invasion of Ukraine—to justify price hikes that exceeded increased input costs.

Writing about the shortage of intravenous fluid last month, the Prospect’s David Dayen explained how Hurricane Helene flooded a North Carolina factory that’s a key producer of IV solution, less than a decade after Hurricane Maria did the same thing to IV bag factories in Puerto Rico. As Dayen put it, the storm “is only the surface-level cause; it’s really about America refusing to learn the lessons of monopoly fragility.”

That’s why, amid COVID-era inflation, progressives argued against the Fed’s job-threatening interest rate hikes and for a more relevant mix of policies, including a windfall profits tax, stronger antitrust enforcement (the greater supply is dispersed, the more resilient the economy), and targeted price controls. Unlike the blunt tool that Jerome Powell wielded ineffectively, those customized solutions to profit-driven inflation can diminish the power of price-gouging corporations without hurting workers.

Meanwhile, the Roosevelt Institute has shown that in addition to heating up the planet, the price of fossil fuel energy is highly volatile and contributes to inflation. Anyone with an EV knows that (so long as you can charge at home) they cost much less to charge than a similar tank of gas. More broadly, renewable energy is so cheap, and so consistently getting cheaper, that shifting from fossil fuels to renewables will permanently reduce inflationary pressures. Dovish monetary policy can help increase investment in wind, solar, and other forms of green energy.

While insufficient, Biden’s decision to pause the approval of new liquefied natural gas (LNG) export terminals as his administration updates its public-interest criteria is a sound move, from both a climate standpoint and an economic one. Industry-backed arguments about the supposed emission-reducing benefits of LNG have been thoroughly debunked. Trump and other proponents of increased LNG exports, including the fossil fuel executives he made promises to, should be forced to answer for the fact that shipping fracked gas around the world contributes to higher domestic energy prices.

Though much more needs to be done to address the housing affordability crisis in a way that also advances decarbonization, a modest Biden rule requiring homebuilders to improve energy efficiency standards to qualify for federal financing will save Americans more than $2 billion on utility bills. Contrast this effort with Trump’s spiteful defense of outdated light bulbs, toilets, showerheads, and dishwashers, all of which waste resources and eat into wages.

report out last month from Evergreen Action contrasts two futures: one in which the Trump-aligned Project 2025 agenda is implemented and one in which the achievements of Biden’s Inflation Reduction Act are protected and built upon. What it found, unsurprisingly, is that “Project 2025 will result in significant job and GDP losses, higher household energy costs, and higher climate pollution by 2035.”

The left should make clear the economic stakes of climate action. To that end, the Climate & Community Institute last week outlined the contours of a progressive climate agenda, including major investments in green public works projects that would provide good infrastructure and employment, and a redirection of federal resources from militarization to equitable climate mitigation. One of the memos focuses specifically on lowering the cost of living through greater public investment in housing, transportation, utilities, and social safety nets. The left must also make clear that the right’s opposition to such measures will result in economic misery.

Unfair though it may be, inflation remains an albatross around Kamala Harris’s neck. If she loses, widespread anger over rising prices from 2021 to early 2024 will be one key reason why. Democrats have tried—though not as hard or often as they should have—to explain to voters that the recent bout of inflation was caused to a significant degree by corporate profiteering, particularly in highly consolidated industries like Big Oil and Big Ag.

That’s an essential message that ought to be repeated moving forward. Survey data shows that Harris’s vow to crack down on price-gouging is broadly popular. This is especially true among working-class voters, who researchers have found respond well to left-populist criticisms of billionaires and corporate wrongdoing.

It wouldn’t hurt to add a new argument to the repertoire: Global warming is already making your life more expensive. Among other things, curbing planet-heating pollution and investing in green public goods is about protecting you and your loved ones from catastrophic disruptions while moderating the costs of essentials. Anyone who doesn’t take the climate crisis seriously doesn’t care about your material well-being.

The above photo by Robbie Morrison is licensed under CC BY-NC-ND 2.0

2024 ElectionAnti-MonopolyClimate and EnvironmentEconomic Policy

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