Adapting to Climate Change, While Unleashing Our Economy

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Adapting to Climate Change, While Unleashing Our Economy

As explained in prior issues, human civilization is now at the mid-point of the fifth and most important technological revolution in history. From the beginning of the first revolution in 1771, the per capita GDP of the United States has risen roughly 6,400 percent. Assuming that we make an effective transition to the so-called Golden Age of this technological revolution, our per capita GDP is likely to at least double again by the early 2030s.

More importantly, today's global economy means that the standard of living of the world's poorest people is like to rise by 300 percent or more in that same time frame. We'll examine that scenario more closely in our analysis of the trend titled Putting an End to Poverty.

At the moment, however, just as in the early 1940s, the prospects for that transition seem bleak. As detailed in our new book Ride the Wave,1 investors and consumers are naturally averse to risk. As a result, the enormous reserve of underemployed manpower and the global glut of capital are waiting for the right environment to justify commitments by venture capitalists, entrepreneurs, and consumers.

How will that environment be created? It's becoming increasingly clear that energy will be one of the most powerful forces behind a resurgent American economy. Specifically, a vast untapped potential exists for the U.S. to not only supply its own energy needs for the foreseeable future, but also to become a net energy exporter.

To understand the utterly transformational potential of the North American Energy Revolution, just consider the implications for employment. By 2020, it's estimated that the revitalized energy industry will create the following increases in net new jobs:

  • 1.2 million jobs in the oil and gas industry
  • 3.6 million jobs in services to new oil and gas companies and employees
  • 3 million new manufacturing jobs due to low-cost energy
  • 9 million jobs providing services to new manufacturers and their employees
  • 5 million jobs created by eliminating half of the energy trade deficit

Combined, that's an increase of 21.8 million new net jobs in the U.S. within the next seven years. To put that number in perspective, according to the latest figures released by the U.S. Bureau of Labor Statistics, 12 million Americans were unemployed in February 2013.2 Simple math shows that the North American Energy Revolution could wipe out unemployment; this would create a labor shortage that would drive up wages, which in turn would cause a surge in consumer spending and a boom in the economy...

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