The global pandemic, COVID-19, has sent the federal government into a sort of frenzy. The crisis has forced the government to step up in this time of need and provide incentives to help sustain the U.S. economy. While this is necessary to avoid a depression, it comes at a price—the federal debt amount is spiking and it will need to be repaid somehow. Combining this pressure with the growing problem of climate change will result in a challenge that we have yet to surmise. We believe that renewable energy will be one of the most effective tools we have in the fight against climate change.
In years past, the federal government’s climate-related disaster recovery spending was already reaching astronomical numbers. In 2017 alone, Congress allotted $136 billion in additional funding for disaster recovery, costing taxpayers about $1,000. This money goes to repairing federally owned properties, insurance, making structures stable, and disaster aid.
Climate Disaster Spending
Last year, 14 billion-dollar disasters occurred, the fifth year in a row with more than 10. Research suggests that the future projections aren’t looking too promising, either. Reports from The National Oceanic and Atmospheric Administration estimated that the average annual number of catastrophes causing over a billion-dollars’ worth of damages over the past five years has doubled the average over the past four decades. The administration warned that this is directly correlated to climate change.
In 2018, the federal government’s national climate assessment predicted continued warming stating, “it is expected to cause substantial net damage to the U.S. economy throughout this century, especially in the absence of increased adaptation efforts.” BlackRock, a global investment firm goes on to suggest that if we continue to use fossil fuels, by the year 2050 we will see a 275% increase in major hurricane risk. PG&E, California’s utility company was forced to file for bankruptcy last year when devastating wildfires ripped across the state causing over $30 billion in damages.
While the federal government will have to cover these losses, state and local governments will struggle because they cannot borrow money as the federal government can. States overwhelmed with disaster costs will be forced to turn to the federal government for assistance. Additionally, banks are moving risky mortgages onto government-backed lenders Fannie Mae and Freddie Mac. With the climate worsening, defaults will rise as the federal government will be personally liable. The Federal Management Agency’s National Flood Insurance Program is over $20 billion in debt. Debt projections continue to increase, and the federal deficit is expected to reach $4 trillion in 2020.
What can be done to reduce our world from the exposure to climate-related disasters? Experts suggest cutting greenhouse gas emissions and increasing spending to bolster infrastructure when faced with extreme climate catastrophes. Greenhouse gas emissions have been dramatically increasing over the years but we’re seeing a positive uptick in wind and solar energy. Advancements to solar equipment and huge cost improvements are making renewables increasingly more competitive with fossil fuels.
Carbon Tax for Change
We recognize we have a choice between a carbon tax or a climate disaster tax. A carbon tax can directly reduce and eliminate the use of fossil fuels that are rapidly destroying our climate as well as provide revenue, job opportunities, and encourage organizations to reduce their carbon footprint. While this may not affect climate change directly for some time, it’s a positive step to take to reduce emissions worldwide and better prepare the United States for other crises that arise, like the current COVID-19 pandemic.
At Intersect Energy, we are a developer of renewable energy. We recognize New Jersey’s Master Energy plan for reducing the state’s carbon footprint and fully support this initiative to address climate change. We’re here to provide you with the most up-to-date information and current energy news in our area. For all the latest solar happenings, be sure to follow us on LinkedIn.