Studies of the economic impacts of climate change often look at long-term, national costs.\u00a0A new BPEA study takes a different approach, focusing on the current household level costs\u00a0attributable to changing weather. The report authors\u00a0examine a range of impacts, from mortality costs due\u00a0of\u00a0wildfire smoke to\u00a0rising insurance costs along coastlines, to provide estimates of annual costs by region and socioeconomic status. On this episode of the Brookings Podcast on Economic Activity, two of the authors, Kimberly Clausing and Catherine Wolfram, join host Samantha Gross for a discussion of their findings and the implications for policymakers.<\/p>\n
[music]\u00a0<\/p>\n
EBERLY:\u00a0I am Jan Eberly, the James\u00a0R.\u00a0and Helen D. Russell Professor of Finance at Northwestern University.\u00a0\u00a0<\/p>\n
STEINNSON:\u00a0And\u00a0I\u2019m\u00a0J\u00f3n Steinsson, Marek Professor of Public Policy and Economics at the University of California Berkeley.\u00a0\u00a0<\/p>\n
EBERLY:\u00a0We are the co-editors of the\u00a0Brookings Papers on Economic Activity, a semi-annual academic conference and journal that pairs rigorous research with real-time policy analysis to address the most urgent economic challenges of the day.\u00a0<\/p>\n
STEINNSON:\u00a0And this is the\u00a0Brookings Podcast on Economic Activity, where we share conversations with leading economists on the research they do and how it will affect economic policy.\u00a0<\/p>\n
For decades, scientists have warned us about the risks of climate change, and studies have documented the national costs of increased climate disasters, both in lives and dollars.\u00a0In a new study,\u00a0\u201cWho bears the burden of climate\u00a0inaction?\u201d\u00a0Kimberly\u00a0Clausing, Christopher Knittel,\u00a0and\u00a0Catherine Wolfram examine those costs at the household level with a special focus on which communities have been the most affected so far.\u00a0\u00a0<\/p>\n
EBERLY:\u00a0There are active debates about the future impact of climate change.\u00a0The\u00a0authors\u00a0have current data on the impact\u00a0that\u2019s\u00a0already happening. They focus on areas such as the cost of\u00a0homeowners\u2019\u00a0insurance and air conditioning that already hit households\u2019\u00a0budgets, plus non-economic costs such as mortality due to poor air quality and excessive heat.\u00a0<\/p>\n
These examples point to different metrics for assessing climate impact, in particular weather extremes, not just the rising average temperature.\u00a0These extremes have a disproportionate impact on poorer households and are likely to become larger over time.\u00a0<\/p>\n
STEINSSON:\u00a0Today\u2019s discussion will feature two of the paper\u2019s co-authors, Kimberly\u00a0Clausing, the Eric M.\u00a0Zolt\u00a0Chair in Tax Law and Policy\u00a0at the UCLA School of Law,\u00a0and Catherine Wolfram, William Barton Rogers\u00a0Professor\u00a0in\u00a0Energy at the MIT Sloan School of Management.\u00a0They will be joined by Samantha Gross,\u00a0Director of Brookings\u2019\u00a0Energy,\u00a0Security,\u00a0and Climate Initiative to discuss their findings.\u00a0\u00a0<\/p>\n
GROSS:\u00a0Thanks, Jan and J\u00f3n for that introduction, and welcome to Kim\u00a0Clausing.\u00a0<\/p>\n
CLAUSING:\u00a0 Thanks so much for having me.\u00a0<\/p>\n
GROSS:\u00a0And to Catherine Wolfram.\u00a0<\/p>\n
WOLFRAM:\u00a0Great to be here, thanks.\u00a0<\/p>\n
GROSS:\u00a0Oh, thank you!\u00a0There are lots of studies examining the costs of climate change out there today, but you do something slightly different: you estimate the costs right now at the household level instead of some broad measure of future costs. How is this different from other studies,\u00a0and how is it that\u00a0nobody\u2019s\u00a0done this before?\u00a0<\/p>\n
[2:56]\u00a0<\/p>\n
WOLFRAM:\u00a0Yeah, thanks.\u00a0So,\u00a0in the economics literature, a lot of the work has been done in the service of\u00a0what\u2019s\u00a0known as the social cost of carbon.\u00a0And\u00a0that\u2019s\u00a0a technical term, but the basic exercise is to try to think about one ton of CO2\u00a0going into the atmosphere now, and then measure all the costs, all the economic costs associated with that ton.\u00a0And since that\u00a0ton\u00a0is\u00a0gonna\u00a0stay in the atmosphere for a long, long time, the bulk of those costs are in the future.\u00a0<\/p>\n
So,\u00a0a lot of\u00a0the literature\u00a0has been really focused on measuring cost over\u00a0a very long\u00a0time period, out into the 2100s. We thought that it was important to quantify the impacts that U.S.\u00a0households are already\u00a0experiencing,\u00a0the impacts of climate change.\u00a0<\/p>\n
And your question about how has no one done this before?\u00a0That\u2019s\u00a0kind of music\u00a0to an academic\u2019s ears, right? That suggests that you think\u00a0it\u2019s\u00a0a good idea.\u00a0So,\u00a0we\u2019re\u00a0happy to fill that role and to do this exercise.\u00a0<\/p>\n
GROSS:\u00a0Thanks, Catherine.\u00a0So,\u00a0what motivated you both to focus on the distributional aspects of climate change?\u00a0<\/p>\n
[4:08]\u00a0<\/p>\n
CLAUSING:\u00a0Yeah, so Catherine and I\u00a0actually first\u00a0met at Treasury in the early Biden years, and one of the things that we asked ourselves is, why is it that people aren\u2019t more interested in carbon pricing?\u00a0And\u00a0I think there\u00a0was some reticence to embracing carbon pricing as a good\u00a0climate policy\u00a0option\u00a0for the United States.\u00a0<\/p>\n
One big part of that reticence was the distributional effect. This\u00a0concern\u00a0that if you made energy more\u00a0expensive,\u00a0that\u00a0it would disproportionately hurt those at the bottom of the distribution.\u00a0And\u00a0so,\u00a0we started thinking about distribution more generally\u00a0and if you think about climate policy, really a lot of it does have that\u00a0possible\u00a0characteristic, like if you regulate\u00a0something,\u00a0it also raises energy costs, and that could be regressive. If you give tax cuts to firms that might use clean energy, that might disproportionately help those at the top.\u00a0<\/p>\n
So,\u00a0we saw this pattern over and over again, and there are ways you can address this.\u00a0Chris Knittel, our third co-author, has some work talking about design solutions that would make carbon pricing more progressive, and people know that if\u00a0you\u00a0dividend it back\u00a0to\u00a0households,\u00a0it\u2019s\u00a0more progressive. But what people\u00a0don\u2019t\u00a0know is what happens if we do nothing?\u00a0<\/p>\n
Like,\u00a0what\u00a0are the distributional effects of that? And\u00a0that\u2019s\u00a0something that\u00a0we\u2019re\u00a0kind of\u00a0investigating\u00a0here. You know, we\u00a0haven\u2019t\u00a0had\u00a0really aggressive\u00a0climate policy in the United States, but we have had the consequences of climate change, and if you look at those consequences, those two might be progressive and that has some important salience.\u00a0<\/p>\n
First, you know, it tells us that if we\u00a0don\u2019t\u00a0do\u00a0anything,\u00a0that has a distributional impact. Two, so\u00a0it\u00a0kind of makes\u00a0an argument for stronger policy, but second,\u00a0I think it\u00a0also helps us better understand public opinion in this area. So what we learn in our results is in part that some parts of the country and some people are experiencing climate change in a sort of big and salient way, but there\u2019s a lot of other households that are seeing much smaller impacts, and that may not be transparently linking those impacts to what\u2019s going on.\u00a0<\/p>\n
So,\u00a0I think this can also help us unpack why climate action is so difficult.\u00a0\u00a0<\/p>\n
GROSS:\u00a0Yeah, I agree with you that we focus a lot on the costs of dealing with climate and\u00a0absolutely not\u00a0at all at the cost of\u00a0not\u00a0dealing with climate.\u00a0So,\u00a0I was excited to read this paper also.\u00a0<\/p>\n
So,\u00a0what climate costs do you include in the study and how did you select the cost to include?\u00a0<\/p>\n
[6:36]\u00a0<\/p>\n
WOLFRAM:\u00a0Sure.\u00a0So,\u00a0what we end up finding is that the\u00a0big ticket\u00a0items, meaning the things that are really\u00a0impacting\u00a0U.S.\u00a0households a lot right now,\u00a0are\u00a0homeowners\u2019\u00a0insurance as there are\u00a0more and more\u00a0storms, wildfires. Those are leading to more damage, and so people\u2019s insurance\u00a0costs,\u00a0insurance premiums are going up.\u00a0<\/p>\n
We also look at\u00a0households\u2019\u00a0exposure to fine particulate matter from wildfire smoke and the\u00a0cost that\u00a0that has on,\u00a0as we measure it,\u00a0mortality, but\u00a0something\u00a0that\u2019s\u00a0outside of our\u00a0study, but\u00a0surely happening is that people are getting sick,\u00a0even if\u00a0they\u2019re\u00a0not dying.\u00a0There\u2019s\u00a0been some literature\u00a0that\u2019s\u00a0shown that after wildfire smoke, it\u2019s not just the wildfire itself, but it\u2019s, you know, you can be hundreds, even thousand miles\u00a0away\u00a0and you get exposed to the smoke.\u00a0But people are finding that there are increased emergency room visits, so we find that\u00a0that\u2019s\u00a0a\u00a0big ticket\u00a0item.\u00a0<\/p>\n
And then,\u00a0the costs that state, local, and the federal government are bearing to clean up from the natural disasters and to help people out after the natural disasters. Those costs are being recovered\u00a0through state, local, and federal taxes, and that we find is a big item.\u00a0<\/p>\n
So,\u00a0we also looked at things that the\u00a0previous\u00a0literature has focused on, which are much more tied to\u00a0kind of the\u00a0direct impacts of temperatures,\u00a0so that the\u00a0previous\u00a0literature is really focused on things like higher energy costs. As temperatures go up, households are spending more\u00a0for\u00a0air conditioning.\u00a0<\/p>\n
People have also looked at how as temperatures go up, there\u2019s increased mortality,\u00a0that heat can kill. And\u00a0finally,\u00a0that\u00a0crop yields go down when there are lots of extreme heat days.\u00a0So,\u00a0we found that for\u00a0U.S.\u00a0households, that\u00a0those costs were quite low. If you take the energy costs or the mortality costs, we find, and this is very consistent with a lot of\u00a0previous\u00a0literature\u00a0that\u00a0cold also\u00a0kills\u00a0and cold is also a driver of more energy costs.\u00a0<\/p>\n
And so the fact that it\u2019s getting warmer,\u00a0and it is certainly getting warmer,\u00a0means their cost and benefits that people are less likely to die from cold, even if they are more likely to die from heat and they\u2019re spending less on their heating bills, even if they are spending more on their air conditioning bills.\u00a0<\/p>\n
GROSS:\u00a0So,\u00a0Catherine, the effects that\u00a0you\u2019re\u00a0talking about are all\u00a0sort\u00a0of\u00a0second order\u00a0effects of climate change:\u00a0they\u2019re\u00a0not directly that the world got\u00a0hotter,\u00a0they\u2019re\u00a0the things that happened because the world got hotter,\u00a0storms and fires and such.\u00a0<\/p>\n
But attribution is one of the biggest challenges of estimating the costs of climate change.\u00a0To what extent is a natural\u00a0disaster\u00a0the result of climate change?\u00a0And to what extent\u00a0it is\u00a0something that might have happened anyway?\u00a0How do you handle that attribution challenge in your work?\u00a0<\/p>\n
[9:35]\u00a0<\/p>\n
WOLFRAM:\u00a0Yeah,\u00a0you\u2019ve\u00a0pinpointed an important challenge.\u00a0So,\u00a0one thing that we do\u00a0is we\u00a0take what we call a less conservative approach and a more conservative approach.\u00a0So\u00a0we try to\u00a0bound\u00a0things. The other thing we do\u00a0is we\u00a0look\u00a0to\u00a0the\u00a0previous\u00a0literature and see what\u00a0climate scientists have assessed the increased rate of forest\u00a0fires\u00a0or the increased strength of hurricanes are, and\u00a0I\u2019m\u00a0not a climate scientist, but\u00a0I\u2019ll\u00a0try to summarize quickly what they do.\u00a0<\/p>\n
They\u00a0basically build\u00a0big atmospheric models and see what the model looks like with lower\u00a0temperature, see what the model looks like with higher\u00a0temperatures,\u00a0and so they can assess\u00a0how much more likely forest fires are and how much more likely storms and flooding\u00a0is.\u00a0So,\u00a0we look\u00a0to\u00a0that literature.\u00a0<\/p>\n
I do think that that\u2019s part of why economists at least\u00a0haven\u2019t\u00a0focused on some of these, as you say, indirect impacts of climate change,\u00a0\u2019cause\u00a0it\u2019s really handy to look at\u00a0temperature.\u00a0We have really good projections from climate scientists.\u00a0Like very, very precisely how much temperature has changed already and how much temperature\u2019s\u00a0gonna\u00a0change for the next couple hundred years.\u00a0<\/p>\n
But we think that\u00a0it\u2019s\u00a0important to get comfortable with a little bit of uncertainty because certainly for\u00a0U.S.\u00a0households,\u00a0we\u2019re\u00a0seeing that the direct impacts of temperature are\u00a0kind of almost\u00a0trivial\u00a0relative\u00a0to the indirect impacts the\u00a0things like wildfire smoke and tire insurance costs.\u00a0<\/p>\n
GROSS:\u00a0So,\u00a0let\u2019s\u00a0get down to the actual answer to the question that you both are asking:\u00a0what are the current costs\u00a0to\u00a0households of climate change and how do they vary across geography or across income levels?\u00a0Like,\u00a0who\u00a0really is bearing the cost of climate change today?\u00a0<\/p>\n
[11:24]\u00a0<\/p>\n
CLAUSING:\u00a0Yeah, so this really relates to Catherine\u2019s prior answer.\u00a0When you look at the costs,\u00a0the vast majority of\u00a0them are related to natural disasters. And\u00a0so\u00a0for the typical household, you know,\u00a0it\u2019s\u00a0between\u00a0$500-600 in our less conservative estimate. But\u00a0there\u2019s\u00a0about\u00a010% of households that have costs that exceed $900 a year, and most of those costs are either coming from the mortality associated with increased particulate matter from fires or other natural disasters, or from the increased home insurance costs, which are about $350\u00a0in the less conservative estimate.\u00a0<\/p>\n
So natural disasters are really driving a lot of the costs, and that has\u00a0a big impact\u00a0on where you see the cost, like which households are getting\u00a0most\u00a0hit. If you look at the map in our paper,\u00a0you\u2019ll\u00a0see, well, rural California is one area that experiences\u00a0high costs, and\u00a0that\u2019s\u00a0explained by forest fires, which are driving up\u00a0home insurance prices in rural\u00a0California, but\u00a0also\u00a0causing\u00a0more mortality in the counties where people are breathing\u00a0a\u00a0lot of that smoke.\u00a0<\/p>\n
Another region where you see\u00a0really strong\u00a0high costs\u00a0is\u00a0the Gulf Coast, right?\u00a0And that the Gulf Coast has a lot of floods, hurricane\u00a0damages, and the like, right? And that\u2019s\u00a0gonna\u00a0drive a little bit of mortality, less than\u00a0the particulate matter, but also higher insurance prices for houses.\u00a0<\/p>\n
And\u00a0so,\u00a0if\u00a0you\u2019re\u00a0thinking about income distribution, then well, you also\u00a0have to\u00a0ask the questions, well, are those counties that are having these natural\u00a0disasters, are they\u00a0poorer or richer than typical counties?\u00a0And on average,\u00a0they\u2019re\u00a0poorer\u00a0than\u00a0typical counties, so\u00a0you also get this pattern\u00a0where both the mortality costs are declining as a share of income for counties and rich counties have less a particulate matter in their air than the poorer counties on average, right? Of course, there are exceptions, but also with respect to things like home insurance,\u00a0it\u2019s\u00a0just a bigger share of a poorer person\u2019s consumption bundle than it is of a richer person\u2019s consumption bundle.\u00a0<\/p>\n
So,\u00a0we get this sort of aggressive pattern across income, but also this geographically disparate pattern based on where the disasters are.\u00a0\u00a0<\/p>\n
GROSS:\u00a0Was there anything surprising in this data that jumped out at you, either geographically or at an income level on\u00a0who\u2019s\u00a0most affected?\u00a0<\/p>\n
[13:41]\u00a0<\/p>\n
CLAUSING:\u00a0The surprising thing was really what Catherine was pointing to earlier, which is:\u00a0everybody has emphasized so much heat in this question, and you know, our first results to come\u00a0back\u00a0were actually saying,\u00a0heating costs are falling in the winter, they\u2019re\u00a0rising in\u00a0this summer because of\u00a0cooling, so\u00a0you\u2019re\u00a0getting a net, a very tiny effect from the change in temperature and on the mortality side too, right? You know, people are less likely to die of cold, more likely to die of heat, but\u00a0it\u2019s\u00a0kind of netting\u00a0out.\u00a0<\/p>\n
So,\u00a0I think the surprising thing\u00a0was how much of the total cost is\u00a0really natural\u00a0disaster driven\u00a0and that does suggest, as Catherine points out, that this research is\u00a0gonna\u00a0be a little more difficult than if we could just use something\u00a0really easy\u00a0to measure like temperature. But that also is the finding\u00a0that\u2019s\u00a0really driving\u00a0the distributional patterns that I just mentioned.\u00a0\u00a0<\/p>\n
GROSS:\u00a0Yeah, I think that insight that economists have looked at temperature just because there was a thing they were more certain about is a really interesting one.\u00a0<\/p>\n
[14:36]\u00a0<\/p>\n
WOLFRAM:\u00a0I would also\u00a0add,\u00a0I\u00a0don\u2019t\u00a0think that people should get too fixated on the exact number that we\u00a0come up with. We know that we are not measuring\u00a0a number of\u00a0things that are affecting U.S.\u00a0households\u00a0and we itemize those, but I do think, as Kim emphasized, the allocation between\u00a0temperature-related\u00a0expenses and natural\u00a0disaster\u00a0and\u00a0wildfire-related\u00a0expenses, we\u00a0think\u00a0is one of the key findings.\u00a0I mean, we can tick off some of the things we know\u00a0we\u2019re\u00a0missing. I already mentioned health costs in addition to mortality, but certainly there are other vectors that\u00a0we\u2019re\u00a0not even able to measure. You know, if\u00a0there\u2019s\u00a0a flood in Brazil and coffee prices go up,\u00a0that\u2019s\u00a0something that U.S.\u00a0households will bear.\u00a0<\/p>\n
So,\u00a0I think, as I say,\u00a0don\u2019t\u00a0get too fixated on the number, but we do think that the vectors are interesting.\u00a0\u00a0<\/p>\n
GROSS:\u00a0Yeah, the order of magnitude, I\u00a0think,\u00a0is\u00a0the\u00a0important part. And speaking of that, did your research give you any feel for how these costs might change over time or how the geographic or income distribution might change over time?\u00a0<\/p>\n
[15:40]\u00a0<\/p>\n
WOLFRAM:\u00a0Yeah. I will say that in the research process,\u00a0we\u00a0actually got\u00a0more and more\u00a0current wildfire smoke data, and every time we added an\u00a0additional\u00a0year of data, things got worse. And so maybe\u00a0that\u2019s\u00a0not a trend,\u00a0maybe that\u2019s\u00a0just happenstance,\u00a0maybe 2023\u00a0and 2024 were particularly bad years.\u00a0I think we\u00a0are\u00a0gonna\u00a0see year to year variation, but in general, the trend is\u00a0gonna\u00a0be in that direction with every year is\u00a0gonna\u00a0get worse.\u00a0<\/p>\n
I do think we should also pay attention to the potential for discontinuities,\u00a0also. It might not just be that things\u00a0trend\u00a0upwards, but for instance, when reinsurance rates go up,\u00a0there could be this real discontinuity in people\u2019s insurance costs.\u00a0<\/p>\n
This is very much a study about what U.S.\u00a0household\u2019s current experiences, so asking us to project in the future is a little bit out\u00a0of\u00a0scope, but as you say, I think the research process itself unveiled some of what we might expect to see.\u00a0<\/p>\n
GROSS:\u00a0So,\u00a0getting to where the rubber meets the road on this, what can policy makers take away from your study?\u00a0We know that climate policy is really tough right now, but on the other hand, everybody likes to see their expenses go down.\u00a0Does\u00a0that\u00a0bring us some space to work to lower these costs,\u00a0even in today\u2019s difficult environment for climate policy?\u00a0<\/p>\n
[17:08]\u00a0<\/p>\n
CLAUSING:\u00a0I think one of the interesting things here, building on the last question, is that we expect climate change to get worse over time, you know. All the climate modeling\u00a0suggest\u00a0that, but\u00a0it\u2019s\u00a0also global collective action problems. We\u00a0have to\u00a0worry about how our actions influence other countries and how other countries influence us.\u00a0So,\u00a0this is\u00a0a very difficult\u00a0problem to solve.\u00a0<\/p>\n
But one of the interesting things about our results is it\u00a0sort of implies\u00a0that even if you take just a narrow view and you ask,\u00a0what are the costs in the United States,\u00a0period? You know, like\u00a0pretend\u00a0we\u00a0don\u2019t\u00a0care about any other country in the world. They\u2019re already really\u00a0significant\u00a0costs, and those costs compare, I think, favorably to the costs of climate action. In some work that Catherine and I did with John\u00a0Bistline\u00a0and Neil Mehrotra\u00a0and Jim Stock, we found that the variation in household energy bills between\u00a0a very aggressive\u00a0climate policy and a very passive climate policy was\u00a0really only\u00a0about.\u00a05%, no matter which\u00a0policy lever\u00a0you were moving.\u00a0<\/p>\n
And so that sort of implies that the cost that a household is\u00a0gonna\u00a0see is really\u00a0already of\u00a0a scale that might be dwarfed by the cost of inaction, right?\u00a0So,\u00a0if solving this problem or working to solve this problem together with other countries might cost your household $400, but\u00a0you\u2019re\u00a0already suffering 500 from\u00a0the climate\u00a0change, that kind of makes for a more compelling\u00a0policy case.\u00a0<\/p>\n
I also think\u00a0there\u2019s\u00a0some things we could learn about policy design that could even insulate households from such modest costs, right? And, and\u00a0we\u2019re\u00a0working on some work now about suggesting how we could make carbon pricing, for instance, more palatable in the United States by\u00a0perhaps\u00a0rebating\u00a0some of the costs\u00a0for\u00a0households\u00a0is one\u00a0example, or\u00a0just designing it with some\u00a0carve-outs. But you could still get\u00a0really\u00a0effective climate policy from this tool. And a lot of other countries and subnational\u00a0jurisdictions\u00a0in the United States, including California, where I am today, are experiencing benefits in emissions reductions from carbon pricing at\u00a0pretty low\u00a0abatement costs, right?\u00a0So,\u00a0it\u2019s\u00a0a pretty\u00a0efficient\u00a0tool.\u00a0<\/p>\n
I also think there\u2019s some really interesting policy implications based on the geographic element of this.\u00a0And our third co-author, Chris\u00a0Knittel, has done some really important work sort of thinking about how policy could adopt this geographic variation.\u00a0You could imagine, for instance, that if certain states,\u00a0take Montana as an example, are\u00a0pretty rural\u00a0and have\u00a0high costs\u00a0associated with energy,\u00a0that you might be able to design\u00a0the accompanying policy to make sure that\u00a0Montanans\u00a0aren\u2019t\u00a0more adversely affected than their urban counterparts.\u00a0<\/p>\n
And so I think that\u2019s another way that our research meshes with prior research to suggest policy lessons here is there\u2019s a way to kind of make for Pareto improving policy here, which for those who aren\u2019t familiar with the term means you have a chance to make, in theory, everyone better off without making people worse off,\u00a0if\u00a0you\u2019re\u00a0careful with your policy design.\u00a0<\/p>\n
[20:04]\u00a0<\/p>\n
WOLFRAM:\u00a0I would just chime in with two points, and one is a shout-out to one of our discussants,\u00a0Wolfram Schlenker,\u00a0who brought in some really interesting data showing how different the U.S.\u00a0is in terms of exposure to flood costs\u00a0and suggesting that in most other developed countries,\u00a0they\u2019ve\u00a0taken many more steps to divert the water in ways that avoid having those costs happen in the first place.\u00a0So,\u00a0people talk about this as adaptation, but it does seem like an area where the U.S.\u00a0could potentially learn a lot from other countries.\u00a0<\/p>\n
The second point I would make\u00a0is,\u00a0you said that\u00a0it\u2019s\u00a0a challenging time for climate policy.\u00a0That\u2019s\u00a0certainly the case in the\u00a0U.S. I\u00a0don\u2019t\u00a0wanna\u00a0minimize that, but\u00a0a\u00a0lot of other countries are making\u00a0progress\u00a0and it is a global problem, right?\u00a0The U.S.\u00a0is only maybe 12% of global emissions, and so something Kim and I have been doing research on is an EU policy that is really pushing other countries to think hard about decarbonization and think hard about introducing carbon pricing.\u00a0<\/p>\n
So, the\u00a0U.S.\u00a0is a leader.\u00a0The\u00a0U.S.\u00a0stepping back from that leadership position is a real loss, but there\u2019s action that\u00a0we\u2019re\u00a0seeing in other countries, and hopefully they can get together and make the sum greater than the parts.\u00a0<\/p>\n
GROSS:\u00a0Thank you so\u00a0much,\u00a0Kim and\u00a0Catherine,\u00a0for your discussion. In my own work, I\u00a0often emphasize that climate action can make everyone better off, and this focus on the\u00a0costs and not the benefits is\u00a0a real challenge.\u00a0So,\u00a0I was happy to read your\u00a0paper,\u00a0and\u00a0it\u2019s\u00a0been a pleasure to talk to you both.\u00a0<\/p>\n
[21:45]\u00a0<\/p>\n
CLAUSING:\u00a0Thanks so much for having us.\u00a0<\/p>\n
WOLFRAM:\u00a0Yeah, thank you.\u00a0<\/p>\n
[music]\u00a0<\/p>\n
STEINNSON:\u00a0Once again,\u00a0I\u2019m\u00a0J\u00f3n Steinsson.\u00a0\u00a0<\/p>\n
EBERLY:\u00a0And\u00a0I\u2019m\u00a0Jan Eberly.\u00a0<\/p>\n
STEINNSON:\u00a0And this has been the\u00a0Brookings Podcast on Economic Activity. Thanks to our guests for this\u00a0great conversation\u00a0and be sure to subscribe to get notifications about new releases of this podcast.\u00a0\u00a0<\/p>\n
EBERLY:\u00a0The\u00a0Brookings Podcast on Economic Activity\u00a0is produced by the Brookings Podcast Network. Learn more about this and our other podcasts at Brookings dot\u00a0edu\u00a0slash podcasts. Send feedback to podcasts at Brookings dot\u00a0edu\u00a0and find out more about the\u00a0Brookings Papers on Economic Activity\u00a0online at Brookings dot\u00a0edu\u00a0slash B-P-E-A.\u00a0<\/p>\n
STEINNSON:\u00a0Thanks to the team that makes this podcast possible: Fred Dews, supervising producer, Chris Miller, co-producer, Gast\u00f3n Reboredo, co-producer\u00a0and audio engineer.\u00a0Show art\u00a0was designed by Katie\u00a0Meris\u00a0and promotional support comes from our colleagues\u00a0in\u00a0Brookings Communications.\u00a0<\/p>\n
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