Trump’s Climate Policy: Costly Myths vs. Rising Economic Reality

Trump’s Climate Argument: A Financial Scare Tactic

President Donald Trump has long framed climate action as an economic catastrophe. After withdrawing the U.S. from the Paris Agreement, he claimed the deal was costing America “trillions of dollars that other countries were not paying.” He also warned that President Joe Biden’s push for electric vehicles would bring “economic destruction” to the auto industry—before reversing course and claiming credit for “saving” it. At a 2023 gathering of world leaders, Trump went further, urging them to abandon what he called “this green scam,” warning, “If you don’t get away from this green scam, your country is going to fail.”

Underpinning these claims is a consistent theme: environmental protections are too expensive to justify. Yet this narrative systematically downplays—or outright ignores—the staggering costs of inaction as climate-fueled disasters escalate.

Climate Inaction Already Costing Americans Thousands

A record-breaking heat wave scorched the Western U.S. in late March 2024, intensifying wildfire risks and threatening critical snowpack that supplies regional water systems. The economic fallout is already here. A September 2023 analysis by the Brookings Institution found that climate change—through rising insurance premiums, wildfire smoke health impacts, and other disruptions—is costing the average American household between $219 and $571 per year. For some families, the annual burden exceeds $1,000.

Gernot Wagner, a climate economist at Columbia Business School, argues that while climate action may disrupt certain industries—particularly fossil fuels—it does not harm the broader economy. “There is this prevailing narrative out there, and I guess what I would say is that this is not by accident,” Wagner said. “The fossil fuel industry has spent decades promoting the idea that climate action is too costly.”

Fossil Fuels and the Manufactured Cost of Climate Action

In the early 1990s, the American Petroleum Institute (API) began funding research designed to frame climate policies as economically prohibitive. A 1991 industry-funded study estimated that a $200-per-ton carbon tax would shrink the U.S. economy by 1.7% by 2020—without accounting for the far greater costs of unchecked climate change.

This approach persists in the Trump administration’s cost-benefit analyses for rolling back environmental regulations. Historically, the Environmental Protection Agency (EPA) included health benefits—such as reduced asthma cases and premature deaths—in its cost-benefit reviews of clean air rules. That changed in 2024 when the Trump EPA overhauled the methodology, effectively assigning zero value to human life in its calculations. The administration also discarded the “social cost of carbon,” a metric estimating the economic damage from floods, droughts, and other climate impacts. The Biden administration had set this figure at $190 per ton of CO₂.

Key Takeaways

• Climate inaction costs Americans hundreds to over a thousand dollars annually in higher insurance, healthcare, and infrastructure expenses, per Brookings Institution data.
• The fossil fuel industry has long funded studies exaggerating the costs of climate policies while ignoring the far greater costs of unchecked global warming.
• The Trump EPA now assigns zero value to human life in regulatory cost-benefit analyses and has abandoned the social cost of carbon metric.

“There is this prevailing narrative out there, and I guess what I would say is that this is not by accident.” — Gernot Wagner, climate economist at Columbia Business School