Economy

Globally, we will need to make significant investment in climate action over the next 15 years to successfully address climate goals. These investments are necessary to avoid long-term economic damage. However, these investments can also spur growth. Bold climate action can create a direct economic gain of $26 trillion in the United States through 2030 compared to “business-as-usual.”  On average, for every $1 in climate action investment, communities yield $4 in benefits. In the wake of the COVID-19 pandemic, research has shown that strong climate action and investments can be effective ways for communities to “build back better” from COVID while helping to secure long-term economic success. These dynamics represent economic development potential for com- munities, particularly those that strategically plan to capture the potential.

The recommended actions in the CAP are:

1. Identify economic benefits derived from the implementation of the CAP, especially those which can provide opportunity for the city’s vulnerable populations.
2. Work with the UW-L Small Business Development Center (SBDC) on the creation of a business incubator for increasing climate mitigation and adaptation.
3. Prioritize local businesses when contracting for City-financed energy efficiency and renewable energy projects, with special consideration given to businesses owned by women and minorities.
4. Collaborate with local and regional governments and universities to establish incentives, policies (purchasing, facility standards, etc.) and regulation to promote local research, development, and production of green technology and products.
5. Collaborate with large institutions on purchasing policies and facility performance standards that will stimulate local research, development, and production of green technology and products.

Many of the core strategies of effective climate action – like increasing distributed solar energy and weatherization programs to improve the energy efficiency of our buildings – are inherently local efforts requiring workers “on-the-ground”. This means that much of that investment can stay within our community creating quality jobs. Workers in the types of “green” jobs needed to support our transition to a carbon free economy earn higher and more equitable wages when compared to all workers nationally.

“Green” jobs also have lower formal educational barriers to entry - nearly half of workers in these “green” jobs attain no more than a high school diploma while earning higher wages than similarly-educated peers in other industries.8 Because jobs in this sector tend to require greater scientific knowledge and technical skills than the average American job, these careers often also represent opportunities for workers to gain skills which benefit the local workforce long-term. Ultimately, addressing climate resilience can improve the economic potential for disadvantaged individuals who have continued to confront systemic barriers to opportunity.

The recommended actions in the CAP are:

1. Develop workforce training capacity to assess, train, and place laborers that can take on energy efficiency and renewable energy projects.
2. Collaborate with local educational institutions to create and implement a curriculum for green skills—the knowledge, abilities, values, and attitudes needed to live in, develop, and support a sustainable and resource-efficient society.
3. Provide job skills training, focused on low-income individuals, for alternatives to traditional building demolition such as relocation, deconstruction, and salvage.
4. Provide job skills training, focused on low-income individuals, supporting increased local agriculture to grow, harvest, market and prepare local, climate-friendly food.
5. Establish a Green Jobs apprenticeship and internship program. Promote and subsidize internship placement with local employers.
6. Work with local partners to develop a community green jobs electronic bulletin board promoting local green job opportunities.

The serious effects of the COVID pandemic have shown how easily disruptions can lead to cascading impacts on businesses, workers, and communities. They have also shown the potential for economic impact by significant disruptions. The World Bank calculates that the global economy likely shrank by 4.3% in 2020 (approximately $3.5 trillion).

The potential economic impact of climate change is far greater than what we’ve experienced with the COVID-19 Pandemic. The best-case scenario – one in which the world meets the Paris Agreement climate targets - results in an annual GDP impact by 2050 equal to the impact of COVID. The worst case in which no appreciable emission reductions are achieved results in an annual impact more than four times greater than the COVID pandemic. The world’s largest corporations are now including climate risk and resilience in their business planning. Nearly half of them, including Apple, Nestle and The 3M Company have reported climate-related financial risks of just under $1 trillion with half of the financial risk being assessed as likely, very likely, or virtually certain to materialize.

The potential for economic disruption to small and local business is equally important. Small businesses are central to the stability of the national economy – they account for 44% of the total economic activity and create two-thirds of net new jobs. Their importance in La Crosse is no different — the average firm in La Crosse employs less than 20 people. Building climate resilience within the business community will not only benefit business-owners, but also employees, households, and the community at large.

The recommended actions in the CAP are:

1. Explore the development of “Green Zones” (a place-based policy initiative aimed at improving health and supporting economic development using environmentally conscious efforts in communities that face the cumulative effects of environmental pollution, as well as social, political, and economic vulnerability).
2. Integrate climate change-related risks to local supply chains in development and implementation of the City's economic and business development strategies.
3. Create a “buy local/buy green” campaign to enhance resilience of small local businesses, particularly those with products, services, and operational policies in line with the goals of this CAP.
4. Ensure redundancy in telecommunications and broadband networks to protect commerce and public safety in the event of natural or manmade disasters.
5. Assist industry-specific organizations in identifying economic impacts they face due to climate change and developing economic resilience and funding strategies.
6. Work with distribution, retail establishments, and other large refrigeration users in La Crosse to voluntarily phase out refrigerants with high ozone depletion and global warming potential in advance of US EPA phaseout. Explore rebates for improving refrigeration efficiency.

The initial need for resilience and adaptation investments cannot be met by the current fiscal system of state and federal subsidies and conventional local taxing powers. This is not from a lack of inherent investment value. Instead, it is that their value does not always fit within the traditional financing model. Many investments in community resilience involve short-term costs while their value materializes over the long-term. Others reduce future climate damage, producing significant future benefits, but do not generate financial returns for private capital. Some communities have begun to take advantage of new financing tools like climate bonds and community-based public-private partnerships. Other communities have also begun to establish Climate Funds and emissions trading programs to creatively meet the financing needs of robust community climate resilience.

The recommended actions in the CAP are:

1. Establish a Climate Action Fund for the reinvestment of local funds into local projects that reduce GHG missions.
2. Advocate for municipalities to be able to dedicate all, or a portion, of their Utility Franchise Fees to special use funds for relevant climate action plan implementation.
3. Establish a policy that accounts for all energy efficiency, fuel efficiency, and renewable energy operational cost savings of City buildings and fleets. All savings achieved outside of a performance contract to be invested into a Climate Action Fund as one source of financing for the City's climate action efforts.
4. Collaborate with other municipalities to actively lobby and advocate State for climate action related funding, including support of new state multimodal transportation funding and statewide carbon tax or carbon cap generating new decarbonization funding sources.
5. Develop private, public, and microfinancing loans for renewable energy and energy efficiency improvements.
6. Develop a Carbon Impact Fee that would generate funds to be used for climate mitigation and adaptation implementation.

In the United States alone, within just a few decades, hundreds of thousands of households will be critically impacted by climate change. Chronic flooding alone will impact hundreds of communities on US coasts. According to a study by the Union of Concerned Scientists, over 170 communities in the United States will be chronically inundated from sea level rise by the end of this decade. More than half of these 170 communities are currently home to socioeconomically vulnerable neighborhoods.

Human migration is a natural response to these climate change pressures. The impacts of climate migration will cause accelerated changes for many inland areas, causing them to have much higher levels of migrants than they otherwise would. It is projected that 86% of all communities with populations of over 10,000 will be impacted with climate migration this century. These changes may cause tighter labor markets, increased housing prices, and impacts on income inequality. This climate migration can also have positive impacts such as improved productivity, broadened skillsets within the labor force, and expanded human capital. Proactively preparing for climate migration can help La Crosse maximize the benefits of climate migration.

The recommended actions in the CAP are:

1. Identify affordable housing needs anticipating potential climate immigration and migration. Prioritize transit-oriented development; increased energy efficiency, renewable energy, and electrification strategies; and integration of climate adaptation, ground cover, and tree canopy considerations.
2. Identify potential sustainable economic and community development opportunities for and with climate immigrants/migrants. Establish a proactive communication and marketing campaign.
3. Develop strategies for keeping the cost of living low in the face of possible increased demand due to change migration.

Climate change and the economy are inexorably linked. More frequent and severe heatwaves, floods, droughts, and wildfires in addition to rising sea levels will cost the United States billions of dollars in lost assets, worker productivity, and human health. According to a 2019 study by two EPA scientists, the difference between meeting the Paris Agreement of keeping global warming to less than 2° C and the path our current emissions places us on may account for as much as $224 billion in economic impact annually by 2090.

Carbon pricing is an accounting mechanism designed to represent the link between our economy and the effects of unabated climate change. Carbon pricing establishes a dollar value for every metric ton of GHG emissions representing its share of our future economic impacts. According to a 2019 World Bank report on trends in carbon pricing, a car- bon price range of $40-$80 per ton is necessary as of 2020 to reach the goals set by the 2015 Paris Agreement. In 2020, Wisconsin State legislators proposed an initial cost of carbon in Assembly Bill 766 for the State of Wisconsin at $50. Using the Wisconsin figure, every 1% in La Crosse community-wide emissions reductions will generate over $330,000 in social community benefits alone, not including other economic savings or revenue generation.

• Impacts of current climate conditions that affect the community’s economy and resources that drive it, and consideration of how local business and industry might be affected if these patterns change
• Potential for climate-driven changes in either the supply or demand for products or services that are crucial to the local economy
• Impacts of action to address climate change – or inaction – on various aspects of the local economy, including direct costs or savings, job creation/employment rates, and vitality of the downtown areas and local businesses

Investments in energy efficiency, public transportation, renewable energy, and many other climate action strategies ultimately result in cost savings for community businesses and residents. These savings contribute to an increase in the quality of life for residents and will largely be spent within the community on goods and services, providing indirect and induced economic development potential for the community.

Rather than weakening the economy, climate action can support economic development. Reducing fossil fuel use, improving public transit systems, and growing local food industries contribute to a transition to local energy and labor sources. This transition represents an opportunity for communities to re- duce the wealth leaving the community and increase the share of the wealth that remains in the form of local jobs. Additionally, many potential careers in Climate Action are in more labor-intensive (but less material resource-intensive) sectors of the economy. This shift supports more significant overall employment combined with less resource utilization.