How Climate Change Is Making Americans Poorer

The impacts of climate change are as visible as they are tragic. Sea levels are rising, millions of people have been displaced, and extreme heat and drought is creating famine conditions in East Africa. If emissions are not rapidly curtailed, global warming threatens disruptive change both for the planet and human civilization. At the same time, economic inequality is reaching levels unseen since the French revolution.

Both of these forces seem to offend cherished American values like equal opportunity, unspoiled natural resources, and the ability to create a better life for our children. They also contradict strongly held religious values like stewardship of creation, social justice, and peace.

In Capital in the 21^st Century, Thomas Piketty demonstrates that high levels of inequality tend to produce instability, unrest, and even revolution. He shows how access to capital and inherited wealth tend to concentrate in a smaller and smaller minority and outweigh economic growth over time.

Americans think of the U.S. as being a classless society. Piketty points out that our country invented progressive taxation of income and of large estates, to avoid the inequalities rife in a patrimonial society like “Old Europe.”

The major equalizing economic force of the past century was the post-World War II recovery, which had the effect of redistributing wealth and opening up job opportunities and new industries to millions of people. A booming post-war economy combined with policies like social security, Medicare and Medicaid, and higher upper income taxes to create a relative golden era of economic equality.

But since then, we have been on a downward trajectory of reduced opportunity, reduced equality, and lower household incomes. Without the counterweight of a war or industrial revolution, wealth has begun to concentrate again, exacerbated by factors like reduced income taxes, slow growth, and massive executive compensation.

When you add climate change to the economic picture, it gets even worse. A study published in Science says the poorest areas of the country face losses of up to 20 percent of their income by the end of the century due to global warming impacts. The entire U.S. economy will suffer economic losses on par with the Great Recession of ‘08-‘09.

What can galvanize the economy and open up new opportunities? The answer is a massive restructuring of our economy by replacing fossil fuels with clean energy.

This will not only build new industries; if we do it right, it can offer onramps to higher incomes and better standards of living for millions. By placing a price on carbon and generating revenue to retrain workers and increase accessibility of clean technologies, we will create a virtuous cycle of reduced pollution, accelerated uptake of clean energy solutions and greater economic participation.

With thoughtful policies, we can garner economic benefits much greater than we would get by simply avoiding the negative consequences of climate change. The clean energy industry is by definition more distributed than 19^th century coal and fossil fuel industry. There are about 10 major coal mining companies employing 50,300 people. Compare that to 9,000 solar companies employing more than 260,000 Americans, as of last year.

Because lower income people spend a much greater portion of their income on energy, lowering costs and increasing efficiency, or allowing them to own their own means of production (such as rooftop solar) will help chip away at the gap between the 1 percent and everyone else. Faith communities are already playing a role in this area — installing solar, weatherizing the homes of lower income parishioners, and championing energy efficiency as a part of stewardship.

Addressing inequality is not a new idea for Christians. In Paul’s second letter to the Corinthians, he asks for donations of money to poor Christians in Jerusalem. In 2 Corinthians 8.13-14 he writes, “I do not mean that there should be relief for others and pressure on you, but it is a question of a fair balance between your present abundance and their need…”

Can we say we have a fair balance today?

Re-structuring our energy economy while baking in equity may not be easy, but it offers an elegant solution to the dual threats of the climate crisis and dangerous economic inequality. And the survival of our planet, our democracy, and future generations may well depend on it.