Quashed cleantech opportunities are costing us billions

Mark Gongloff, Tribune News Service

Ever wonder about the financial implications of your life choices? Taking one job over another, spending Christmas with your nephew instead of working through it at your financial firm, that time Bitcoin fell to $400 and instead of filling your boots with the stuff you wrote a column mocking it? We’ve all been there, right?

Such decisions expose us to what economists call “opportunity costs.” Christmas dinner with Fred keeps the ghosts away but robs you of the opportunity to make more money. Not buying Bitcoin in 2014 cost zero dollars and made you feel smart for about two years. But missing out on the chance to buy Bitcoin at bargain prices actually cost several million dollars in the long run.

The US is in the early stages of a colossal example of opportunity cost because of President Donald Trump’s relentless assault on clean energy. Unlike not buying Bitcoin, the US taxpayer has already borne steep up-front costs for this policy, which mainly serves the fossil-fuel industry. But the real economic pain has just begun.

Between his executive orders, regulatory rollbacks, the One Big Beautiful Bill Act and more, Trump has slashed or eliminated tax breaks for renewable projects, canceled permits and ended government programmes and regulations that encourage cleaner energy. He has even spent billions of dollars just to persuade companies not to build wind farms.

This assault has already canceled or delayed 223 manufacturing, energy and industrial projects in the US so far, worth $82.8 billion, according to a report by the BlueGreen Alliance, a nonprofit advocacy group that represents labor unions and environmentalists. That could mean a loss of 111,765 jobs, including nearly 57,000 in construction and more than 47,000 in factories.

And that’s just what’s already on the books. The tax-break restrictions imposed by legislation threaten to end or delay an additional 3,034 projects worth a potential $695 billion in capital spending and nearly 1.2 million jobs. Faced with rapidly approaching deadlines to qualify for breaks, many of these developers could decide it’s not worth the trouble.

Losing these investments and jobs will ripple through the economy for years. People will miss out on jobs that might have paid them more than they’re making now. Some will stay unemployed. And these projects would have supported other industries during their construction and operation.

The hundreds of developments that have so far been canceled, closed or downsized because of Trump’s energy policies will cost the US $55 billion in lost economic growth every year, according to a study by the consulting firm BW Research on behalf of E2, a nonprofit advocacy group. That’s on top of the $91 billion already thrown away because of canceled construction.

BW expects the loss of these projects to cost the US economy 468,000 jobs, including 125,000 construction jobs, in the long run. That’s only slightly fewer jobs than the US economy has produced during Trump’s entire second term. American workers will lose $31 billion in annual wages in the process. Federal, state and local governments will lose $12 billion in annual tax revenue, along with $20 billion in taxes on construction.

Another way of measuring this opportunity cost is to consider what the Inflation Reduction Act would have given the economy had Trump not effectively ended it. An initial $740 billion tax-credit investment would have resulted in $3.8 trillion in private spending, $846 billion in household savings, 13.7 million jobs and $1.9 trillion added to US gross domestic product, according to a study by the research firm ICF commissioned by the American Clean Power Association, an advocacy group. An MIT study, in contrast, predicted the IRA would have “small quantitative macroeconomic effects including a small decline in headline inflation” but still called it “cost-effective.”

These are just the first- and maybe second-order economic effects of losing these projects. The higher-order costs threaten to be far, far bigger. Energy efficiency gains that pack exponentially more financial punch than their initial investment will never be realised. A menu of easily attainable tweaks could save the economy $5 trillion through 2050, by one estimate. Trump and his allies in Congress are trying to block them.

Greenhouse-gas emissions will enter the atmosphere that might otherwise not have, making the planet hotter. This will compound an already large and growing problem of increasingly chaotic weather, which has cost the US economy $7.25 trillion over the past decade, according to Bloomberg Intelligence. Much of that money has been thrown at home insurance, the price of which has soared 46% since 2021, or three times the rate of inflation, according to the comparison site Insurify. American workers have lost more than $1 trillion in wages because of wildfire smoke alone since 2020, BI has estimated.

The good news is that the clean-energy revolution has carried on in defiance of Trump’s attacks. It helps that renewables are relatively cheap and quick to install at a time of soaring energy prices and demand. Solar power recently provided more US electricity than coal for the first month ever. Solar and battery storage capacity made up 91% of all new additions to the grid in the first quarter of this year, a record.

But imagine how much healthier and more prosperous this country and the world would be without Trump’s whole-of-government approach to propping up a fossil-fuel industry in slow decline. Missed opportunities often bring pangs of regret, and this pain will be deep and lasting.