As President Obama prepares for the United Nations Climate Summit next week, he should deliver the message that investing in a strong economy and a healthy environment go hand-in hand by outlining how the United States can stabilize the climate and increase job opportunities as a model for other developed nations. And, according to a new report by the Center for American Progress and the Political Economy Research Institute at University of Massachusetts -- Amherst, such green growth isn't just possible -- it has the potential to be a profitable job creator.
The report, which I co-author with Dr. Robert Pollin, goes beyond calling for greater measures to mitigate climate change. Working from the administration-supported climate goal of 40 percent GHG emissions reduction from 2005 levels by 2035, we determined the fuel mix and level of public and private investment needed to reach that goal. Transitioning to a cleaner energy future entails an annual investment, mostly in the private sector, of $110 billion in clean energy and $90 billion in energy efficiency. That's a total expenditure equaling 1.2 percent of U.S. GDP, or public expenditures equaling 0.3 percent GDP. To put this $200 billion annual investment into context, that is 40 percent less than the oil and gas industries invested in 2013. An even more stark comparison can be found in recent White House projections that a 3°C degree increase in temperatures would lead to $150 billion in economic damages every year in perpetuity. Put simply, we can't afford not to begin this clean energy investment program immediately.
Capital investment is essential to transform the physical infrastructure upon which our economy runs. We find in this report, that in order to avoid a climate crisis, within the next 20 years, the U.S. economy must achieve a 30 percent increase in energy efficiency economy wide. We must cut our use of fossil fuels by 40 percent, and increase reliance on clean renewable energy by four times current capacity. We cannot wait to do this; the window of opportunity to stabilize our changing climate is small and closing rapidly. Reducing U.S. CO2 emissions by 40 percent within 20 years is possible, but will require major absolute reductions in U.S. consumption of oil, coal, and natural gas -- about 60 percent for coal, 40 percent for oil, and 30 percent for natural gas. And, two decades is the timeframe within which energy infrastructure is planned, financed, and built. In short, the moment for action is now.
Based on careful review of currently available technology and economics, our report determines that such a transformed fuel mix, while ambitious, is entirely achievable without undue disruption to the security, reliability, or affordability of the domestic energy system, and with no new breakthroughs in technology. The investments described above can also be used to help long-struggling fossil-fuel-dependent communities diversify their economies to find a stronger footing in a clean energy future. This future simply requires vision, investment, and follow through. It is ours for the taking.
The investment, fuel mix, and flexible policy options outlined in our report "Green Growth" will result in 4.2 million overall jobs created across the economy at a wide range of skill and wage levels. That translates to a 2.7 million net increase in jobs, even after estimated contractions in fossil fuel sectors. This doesn't even account for improved health quality outcomes due to a cleaner environment. So as President Obama and other world leaders work to mitigate climate change next week, I urge them to keep one message in mind: Invest in a healthy climate and strong economy. It's possible, it's profitable, and it's way overdue.
Bracken Hendricks is a Senior Fellow at the Center for American Progress.