Will Transitioning to Clean Energies Destroy The Economy?

Or will switching to renewable energy drive economic growth, create new jobs, and improve public health instead…

I have been writing about climate change science for a while now. I couldn’t be happier with the feedback from all of you. But from time to time, I get a not-so-sweet comment from angry readers who fear that this is all a hoax and that transitioning to clean energies will destroy our economies. They picture jobs vanishing, bills going through the roof, and businesses collapsing.

So far I have been addressing other concerns, such as whether climate change science is trustworthy (it is), if a significant number of scientists don’t believe in human-driven climate change (in fact, there is more than 97% acceptance among scientists), or that climate change was a common event throughout Earth’s history and never driven by exceptionally catastrophic circumstances (it was always something bad happening). Each time, I did what I was trained to do and performed a literature review on the topic. So, for our next topic, I chose this one: what do economic scientists and modelers have to say about the transition to green energies?

I was pleasantly surprised that a recent report based on highly computational research methods (our favorite) shows that the clean energy transition could be an economic game-changer. And far from destroying economies, it creates jobs, cuts costs of living, and even saves lives.

The Economic Benefits of a Green Transition

The Cambridge Econometrics report, “Cutting Bills and Creating Jobs: The Economic Opportunities of the Clean Energy Transition,” provides a comprehensive look at how going green can actually boost the economy. The report suggests that a rapid shift to renewable energy would help create new jobs and facilitate cost savings, potentially reshaping entire industries.

The report’s authors used a detailed economic model to compare two scenarios: a business-as-usual (BAU) approach with little changes and an accelerated transition scenario (ATS) focusing on renewable energy and energy efficiency. The study results are clear: the green transition leads to economic growth, job creation, and lower energy costs over time.

More Jobs

One of the biggest concerns some people have about going green is job loss. What would happen to the people who work in coal and natural gas if we moved away from them? The report finds that while some jobs in fossil fuel sectors will disappear, many more are created in renewable energy and energy efficiency. These new jobs would be in construction, utilities, and other sectors related to renewable energy.

See the chart below. Keep in mind that thousands of 1,000 is a million. Note that all countries are expected to add jobs during the energy transition, with the US adding over a million jobs over the next 10 years alone.

Cutting Energy Costs

The report also reveals that the cost of the green transition isn’t as high as you might think. While the initial investment is significant — about $320 billion a year from 2020 to 2050 — the long-term savings are far greater. By the 2040s, the energy transition could lead to over $700 billion a year in savings. These savings would come from lower energy costs and reduced system losses alone; other savings, such as fewer pollution-related illnesses (health benefits), are not accounted for here but discussed later.

The study points out that air pollution from fossil fuels leads to many health issues, from asthma to heart disease. Cities like Delhi and Beijing are known for their smog-filled skies, and pollution causes around 7 million deaths worldwide yearly. By shifting to renewable energy, we can significantly reduce air pollution, leading to fewer pollution-related diseases and a cleaner environment. Win-win.

Beyond the Numbers

However, it’s not just about jobs and costs. The clean energy transition can lead to a better quality of life for everyone. Cleaner air means fewer health problems, lower healthcare costs, and fewer sick days. The report also highlights the environmental benefits of reforestation and reduced carbon emissions, which can help combat climate change and create healthier ecosystems overall.

The report’s accelerated decarbonization scenario envisions a future where countries reach net-zero CO2 emissions by the mid-2050s. Yes, this transition requires significant public and private investment, but it ultimately leads to a more sustainable and resilient economy. Remember when we thought it was impossible to prevent people from smoking in public spaces, and we now can’t even picture the idea? Change is hard, but once people realize it benefits them and their health, things settle and become normalized. A healthier society arises.

Investing in renewable energy can build a future with better health outcomes, more jobs, and lower costs. And more enjoyable outdoors, whichever your preferred outdoor activity is (ours is rock climbing, by the way).

The idea that going green will destroy the economy doesn’t hold up against the evidence. Dr. Rob Alexander, a Professor of Economics and Environmental Studies, puts it very nicely in his essay “Would transitioning to renewable energy hurt the economy?”:

Even if climate change were not such an urgent issue, the shift to renewable energy would make sense on purely economic grounds alone. Given the need to avoid the most significant impacts of climate change, the case isn’t even close. A shift to a renewable energy infrastructure is a win-win for our society.

— Dr. Rob Alexander, Professor of Economics and Environmental Studies

Transitioning to ‘green energy’ isn’t just about protecting the environment. It does, in fact, create a stronger, more resilient economy. Even if you just consider the energy security and sovereignty — multiple, local renewable energy sources, as opposed to being beholden to oil Kingdoms and dictatorships far away. This is a transition to a world where fewer people get sick from pollution, we pay lower energy bills (see local production versus international oil markets), and more jobs for everyone (see local production again!). It’s time to embrace the clean energy transition and its many benefits because the more support it gets, the quicker it arrives.