By Thomas Kostigen
For decades some members of the business community have pushed back against efforts to mitigate the effects of global warming with claims that such pledges to reduce greenhouse gas emissions put the United States at a global economic disadvantage.
Last week, the Biden administration committed to the biggest reduction of greenhouse gases in US history, with plans to reduce these emissions by at least 50 percent over the next decade. The plan is for the US to become a zero emissions economy by 2050. This will, President Biden announced, create more jobs and be a fiscal boon at the local as well as federal level.
So, who is right, the faction of people who believe that climate change mitigation efforts are bad for business, or those who believe the actions are good for profits and the planet alike?
No matter, investors should be aware of the pluses and minuses to climate plans, especially those as bold as Biden’s. Oil and gas companies will likely have to adapt to the new business of climate change or face irreversible revenue declines. Beef producers, too.
According to one analysis, people would have to cut their red meat consumption by 90 percent and other animal product consumption by 50 percent in order to help meet the goals of the Biden climate plan. The reports say this reduction would limit every person to consuming only one hamburger per month as their meat quota. Raising livestock produces vast amounts of greenhouse gas emissions. Along with transportation and manufacturing, it’s one of the biggest contributors to climate change.
On the transportation front, electric vehicles would have to be the norm. Indeed, more than half of all new car sales would have to be electric vehicles (and 10 percent of truck sales) over the next 10 years to help meet the Biden climate plan. Of course, these electric vehicles would have to be charged by alternative energy sources, such as solar and wind power.
Homes, too, would need to make the switch to electricity for heating. Twenty five percent of all the houses in the US would need to be heated by electricity that is in turn is powered by non-fossil fuel energy.
“I see workers capping hundreds of thousands of abandoned oil and gas wells that need to be cleaned up, and abandoned coal mines that need to be reclaimed, putting a stop to the methane leaks and protecting the health of our communities. I see autoworkers building the next generation of electric vehicles, and electricians installing nationwide for 500,000 charging stations along our highways. I see the engineers and the construction workers building new carbon capture and green hydrogen plants to forge cleaner steel and cement and produce clean power. I see farmers deploying cutting-edge tools to make soil of our Heartland the next frontier in carbon innovation. By maintaining those investments and putting these people to work, the United States sets out on the road to cut greenhouse gases in half — in half by the end of this decade,” Biden said.
But others, including those in the oil and gas unions don’t see it that way. They see oil and gas jobs going overseas instead. That, of course, doesn’t address the domestic jobs that will be in demand. No one can argue that more green jobs, as they are dubbed, will be created; the question really is how many climate-change contributing jobs, such as those in the oil and gas sector, will be lost.
Some sectors of the economy will surely bleed more than others, and some business segments will prosper more quickly. A good financial advisor should be able to unpack and make sense of the economic future based on climate change because no matter which side you believe, the economic future will be based on climate change. Now it’s about picking winners and losers.
Thomas Kostigen is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Thomas is a best-selling author and longtime journalist who writes about environmental, social, and governance issues.