A steel mill in Hefei, China, March 2006
Stringer China / Reuters
In the United States, the case for greater action on climate change is typically made on environmental grounds. But there are equally compelling economic, geopolitical, and national security rationales for the United States to lead the world on climate policy. Even those who remain skeptical of the environmental urgency of the problem should recognize the overwhelming strategic advantages of U.S. climate action at home and abroad. 
Those who oppose greater U.S. engagement and ambition have legitimate concerns. These concerns tend to fall into two buckets. The first is economic: the chief worry is that global climate solutions could put the U.S. economy at a competitive disadvantage with its trading partners and reduce American living standards. The second set is geopolitical: some observers wonder why the United States should reduce its own greenhouse gas emissions if other countries won’t do their part. 
But a well-designed U.S. climate policy can replace national vulnerabilities with major strategic opportunities. We propose here an environmentally ambitious, economically sound, and politically feasible plan that situates the United States at the forefront of a clean energy future, enhances the competitiveness of U.S. firms, and allows all Americans to benefit directly from emission reductions. Such a plan would also speed up and strengthen the United States’ economic recovery once the immediate health concerns from the novel coronavirus outbreak subside.

AMERICA’S CARBON ADVANTAGE

Consider first the relationship between national climate policy and international competitiveness. Contrary to the traditional perception that more action on climate change would undermine American competitiveness, the lack of a coherent national climate policy now poses a significant risk to U.S. firms. That is because the current rules of global trade effectively subsidize carbon-intensive production overseas and prevent the United States from reaping the economic benefits of its competitive advantage in low-emission manufacturing.
The chief competitors to U.S.-based firms in China, India, Russia, and other countries generally operate under lax environmental standards and produce goods in a more carbon-intensive manner. Yet they currently pay no penalty for this. For example, China is now the world’s largest steel manufacturer, even though its average production of steel is more than twice as carbon intensive as the United States’. A similar pattern emerges in a variety of industries: motor vehicles, chemicals, even solar panels and agricultural products. In each case, U.S.-based firms compete on an unlevel playing field because the current rules of the game put them at a competitive disadvantage. Rather than lower U.S. climate ambitions, a better response would be to encourage U.S. trading partners to raise their standards or penalize them for their polluting ways.
The United States cannot remain the world’s foremost power if it is not also its leading energy innovator.
Further misconceptions exist about technology. Republicans are right to focus on clean energy innovation as the key to reducing carbon emissions. Yet some conservatives seem not to realize that the United States is falling behind in the clean energy race. The innovation coming out of U.S. universities, national labs, and businesses is impressive, but too few of the results are being produced in the United States and too little of it is making its way into commercial applications.
Here, too, a comparison with China is revealing. China is now the world’s top producer, exporter, and user of wind turbines, solar panels, and batteries—the essential building blocks of a clean energy economy; the United States is in fourth place, trailing Germany and Japan. China also accounts for 60 percent of global electric vehicle sales, and the country has long-range plans in place to turn itself into the global leader in developing the fuels and cars of the future. The United States cannot remain the world’s foremost power if it is not also its leading energy innovator.
Another common misconception is that climate action in the United States is too expensive or risks undermining the U.S. economy. Thanks largely to the shale and fracking revolution pioneered in the United States, market prices for natural gas have fallen by 70 percent since 2008, so the cleanest fossil fuel is now also the cheapest fossil fuel. During roughly the same period, the cost of solar power dropped by nearly 90 percent, and the price of wind power dropped by 70 percent. By capitalizing on efficiency gains and replacing coal with natural gas and solar and wind energy, the United States has cut its greenhouse gas emissions by 12 percent since 2005, all while maintaining a vibrant economy.
Although the United States and its trading partners have a long way to go in reducing emissions, a fundamental paradigm shift is occurring. Climate action and economic growth, far from being mutually exclusive, are not only compatible but also increasingly interdependent.
A wind farm in Latimer, Iowa, February 2020
A wind farm in Latimer, Iowa, February 2020
Jonathan Ernst / Reuters
The U.S. economy has prospered in recent decades because the U.S. public and private sectors were the first to embrace the communications and information technology revolutions. The transition to clean energy promises equally far-reaching economic advantages. Next-generation renewables and nuclear energy could substantially drive down the per-unit cost of electricity, just as the digital revolution drove down costs in recent decades. That is why China is investing so heavily in these sectors. And that is why the United States could be putting its global economic leadership position at risk if it continues to ignore this transformation.
Many corporate leaders have already come to this realization and are pushing for climate action, not just because their customers and shareholders are demanding it but also because of facts on the ground that are affecting their bottom line. The potential domestic economic toll of a warming planet is already difficult to ignore. Greater flooding, storms, wildfires, and droughts harm sectors as varied as real estate and agriculture. Today, taxpayer spending on federal disaster relief is almost ten times what it was three decades ago, after adjusting for inflation. Climate change will exact an ever-greater toll on the U.S. economy over the next several decades if emissions remain on their current course.

RISKS TO THE NATIONAL INTEREST


The United States’ lack of a coherent climate strategy also threatens its national security and, most important, its position and influence in the international arena. The national security implications of climate change are substantial. New research published in Nature Communications has estimated that rising sea levels will put up to 340 million people at risk of annual flooding or permanent inundation during the next 30 years, largely in Asian mega-cities. The World Bank, meanwhile, has found that increased flooding, as well as food and water insecurity, in Latin America, sub-Saharan Africa, and South Asia alone could generate an additional 51 million to 118 million internal “climate migrants” by 2050. This could profoundly destabilize countries around the world, particularly those with poor governance. 
As water scarcity gets worse, control over this vital resource will become a growing source of conflict among states. The current tension between Egypt and Ethiopia over the Nile River foreshadows what might come. And the retreat of Arctic sea ice could change the balance of power among China, Russia, and the United States. A relatively ice-free Arctic would not only open vast new mineral riches to China and Russia; it would also alter world trade routes between Europe and East Asia. 
Competition in today’s multipolar world is characterized less by direct military confrontation among great powers and more by economic and diplomatic rivalry. Seen through this prism, the United States’ lack of a long-term climate strategy harms its ability to promote American interests on a rapidly evolving world stage. The United States risks becoming a bystander, as a prior world order that was overly dependent on Middle Eastern oil gives way to a new one dominated by clean energy.
The United States risks becoming a bystander in a world order dominated by clean energy.
The winner of the emerging clean energy race will determine the economic and geopolitical balance of power for decades to come. The United States faces steep competition in this field. Russia is one of the United States’ main challengers in energy; Moscow has flooded the world with cheap oil and gas through new pipelines and has unveiled a new generation of nuclear plants and fuel agreements with developing countries. Each such investment creates closer geopolitical relationships. Meanwhile, China and India are making major investments in renewable energy technologies (as well as coal-fired electricity). China, already a leading manufacturer of solar and wind technology, seeks to dominate the coming transformation in energy storage and delivery, as well.
At the same time, a lack of economic incentives to reduce carbon emissions in China, India, and other developing countries has resulted in an uneven playing field that forces carbon-efficient U.S. and European companies to compete directly with rivals that have far weaker environmental standards. The lower energy-production costs in developing countries lure global firms away from the United States and Europe. China is adding to the competition by promoting carbon-intensive industrialization in other emerging economies, often powered by new coal plants built through its Belt and Road Initiative. Such investments risk saddling poorer countries with rising carbon emissions. As if that were not enough, China and other emerging economies export their more carbon-intensive goods to the United States in what amounts to “carbon dumping.”
The European Union poses a different kind of challenge. For the past 15 years, the EU has limited emissions through a trading system that allows companies to emit greenhouse gases based on the number of allowances they have purchased within a limited, or capped, marketplace. It is now dramatically expanding its climate-related regulations and planning to tax energy-intensive imports.