When President Donald Trump announced he would pull the United States out of the Paris Agreement on climate change, he cited the "draconian financial and economic burdens the agreement imposes on our country."

But a study published today by the Universal Ecological Fund argues that if Trump really wants to protect US economic interests, he should be doing everything he can to fight climate change. 

"It is often surmised that the cost of addressing climate change would be prohibitively expensive, but the costs of ignoring climate change are already getting very expensive," argues James McCarthy, professor of oceanography at Harvard University and co-author of the report, titled The Economic Case for Climate Action in the United States.

The cost of inaction

The report says economic losses from Hurricanes Harvey, Irma and Maria, and 76 wildfires in nine western states in the US this year - all of which were arguably intensified by human-induced climate change - amount to nearly $300 billion in damage.

"This was such an exceptional year for tropical storms, it was not something we could have anticipated," McCarthy told DW. "We know that storms are becoming more intense, and we know why. But we didn't know that the hurricane season of 2017 would be so damaging."

Along with report co-authors Robert Watson, former chair of the Intergovernmental Panel on Climate Change (IPCC), and Liliana Hisas, executive secretary of the Universal Ecological Fund, McCarthy warns that in the US, as in many other countries, extreme weather events and associated economic damage will continue to increase, unless we dramatically reduce greenhouse gas emissions.

Economic losses in the US from extreme weather events have almost doubled from $211.3 billion in the 1990s to $418.4 billion in the last decade. And over the next decade this figure is projected to reach at least $360 billion annually - equal to an estimated 55 percent of US annual economic growth.

The biggest culprit is the continued burning of fossil fuels, the major cause of climate change. Yet, McCarthy says, "The Trump administration is determined to maximize the use of America's fossil fuels - coal, oil and natural gas - as well as to cut energy industry regulations."

The benefits of an energy transformation

Under former president Barack Obama, investing in technologies that fight climate change was shown to economically beneficial.

"The investments made during the Obama administration resulted in a dramatic reduction in the cost of implementing wind and solar energy in the United States," McCarthy says.

McCarthy notes that in Oklahoma, the home state of Environmental Protection Authority head Scott Pruitt, who denies climate change science and has close ties to the fossil fuel industry, already gets 25 percent of its power from wind, and Iowa now depends on wind for 35 percent of its electricity.

Even oil-rich states like Texas are jumping on the wind bandwagon. McCarthy says it makes sense for the second biggest US state to invest in wind energy. "It's growing the fastest, it has the most potential in terms of its area, and it emits the most greenhouse gases, so in a sense investors have the most to gain by investing [in wind energy] in Texas."

Despite the anti-renewables rhetoric coming from Trump, who has long promised to revive the coal industry and this year killed off an Obama plan to limit its emissions, large scale solar and wind energy may soon be outcompeting traditional fossil fuel energy sources.

"Why would anybody want to build a new polluting coal-fired power plant with all of the downsides related to carbon dioxide and sulfur and particulates and mercury and the associated air pollution and costs for human health, if you could instead use a form that has none of those pollutants and costs no more or in some cases even less," McCarthy argues. "And this is the decision people are making."   

Economic sense - with or without climate change

"Even if we disregard all the costs associated with climate change itself, the economic case for climate action is extremely strong," says Tomas Wyns, a researcher at the Institute of European Studies and author of The Final Frontier - Decarbonising Europe's energy intensive industries.

This is due to what is being called a new industrial revolution driven by green renewable energy technology, the electrification of transport and related industries. 

While Germany's reputation as a global leader on climate action is suffering following news it will miss its 2020 emissions-reduction target, its unprecedented investment in renewables, and particularly its solar subsidy scheme, is now paying off in terms of lower technology costs.

"The demand created through the German program for solar PV that activated mass manufacturing in China ultimately lead to more demand with more production and costs coming down," Wyns says.

"Germany and China created a public good in the form of very cheap renewable energy for the world which is now being deployed massively in India, Latin America, and lately also Africa."  

Wyns also notes that in Germany, but also especially in the UK, wind power is cheaper than nuclear energy and is becoming competitive with fossil fuels like coal. "We never imagined that offshore wind power would now be possible without subsidies," he says. 

Moreover, Wyns predicts that in five years "electric vehicles will massively outcompete classical vehicles," referring, for example, to the huge investment in battery technology in California, the home of Tesla.

"So regardless of all the bad stuff resulting from climate change, the economics of acting in favor of climate protection have become indisputable at the moment."       

This fact is starting to influence public opinion in the United States, says McCarthy, who is confident his report on the economic case for climate action represents a broad church.   

"More people than not are convinced that the science is valid," he says. "More people than not are supportive of Mr. Obama's initiatives that led to the US partnership in the Paris accord. More people than not have stated that they're opposed to president Trump withdrawing from the Paris accord. I think this broad public opinion will be bolstered with the kind of evidence we provide here."