More Debt Is Better Than More Billion-Dollar Climate Disasters
Governments that delay spending now will have to spend far more in the future, when the costs to recover will be higher and the need more dire.
The bill for inaction on climate change keeps rising.
Photographer: Kyle Grillot/Bloomberg
There’s good debt and there’s bad debt. Good debt is a $465 million government loan for your fledgling electric-car company that helps it become the world’s biggest automaker. Bad debt is maxing out your credit cards to buy cartoon apes in 2022.
Depending on your politics, you might consider a government taking out loans to finance the clean-energy transition to be bad debt. But economists keep pointing out that a little bit of deficit spending to fight climate change today will save a whole lot of deficit spending tomorrow, to not only fight a rear-guard action against global heating but also to clean up the expensive mess it will make.