Climate-related Economic Risks and Their Costs to the Federal Budget and the Global Economy

Testimony to the U.S. Senate, Committee on the Budget

*The views expressed here are my own and do not represent the position of the American Action Forum. I thank Gordon Gray, Sarah Hale, and Angela Kuck for their assistance.

Chairman Whitehouse, Ranking Member Grassley, and members of the Committee, thank you for the privilege of appearing today. In this short testimony, I want to make three key points:

Climate change will increase future budget deficits, largely through reduced economic growth and tax revenues;
The existing (baseline) budget outlook is profoundly anti-growth and represents a larger economic risk than climate change; and
Addressing the budget outlook will make more manageable budgeting mitigation and adaptation policies that will feature large, up-front federal outlays.

Let me discuss each in turn.

Budget Impacts of Climate Change

Climate change will likely produce higher average…

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