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The U.S. Economy Is Bigger Than We Thought — Thanks in Part to Renewables

The government was undercounting renewable investment by 45%.

Solar and wind power.
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The American economy is even bigger than we thought — and the booming renewables industry is part of the reason why.

On Thursday, the government’s economic-statistics keeper published a big update of the country’s most important economic indicators. For the first time since 2018, the Bureau of Economic Analysis used the newest research tools to comprehensively revise the country’s gross domestic product, inflation, and other national data.

This update covered the period from 2013 to the first quarter of this year.

The big news is that America’s $27 trillion economy is doing better than economists thought. From 2017 to 2022, the economy grew at a 2.2% annual rate — which was 0.1% better than we previously thought. And as the Harvard economist Jason Furman noted, the update doesn’t change one of the most important facts about the past few years: that in GDP terms, the American economy has fully recovered from the COVID-19 recession and is now growing as if the pandemic never happened. In fact, the economy is growing so vigorously that it seems to be returning to its pre-2009 baseline trajectory of growth.

Which — cool. But the update is interesting because it reveals the larger role that renewable energy and other climate-friendly technologies are playing in America. Over the past few years, for instance, economists have realized that the Bureau of Economic Analysis was using a flawed and proprietary data source to estimate investment in the electricity sector. That data showed that the cost of building new electricity capacity in the U.S. was rising — which was weird because, as Neil Mehrota, the assistant vice president of the Minneapolis Fed, observed, the actual cost of wind and solar have plunged over the past decade.

Now, the statistics bureau has updated its data to use actual price information from the wind and solar industry. And it found that over the past decade, America’s real investment in electricity was 45% higher than we previously thought:

To be clear, this doesn’t mean that there are more wind turbines and solar panels out there than we thought. (That kind of data is tracked by a different agency.) It means that the government was mismeasuring the economic impact of those solar panels and wind turbines: Its official economic statistics were undercounting the amount of real growth happening for each dollar of investment, and therefore missing at least part of the ongoing green boom.

This wasn’t the only climate-savvy update to the government’s methods. The newest GDP data also reflects more accurate costs for the National Flood Insurance program. Sadly, the effect of that program on the economy is far more mixed.

Robinson Meyer profile image

Robinson Meyer

Robinson is the founding executive editor of Heatmap. He was previously a staff writer at The Atlantic, where he covered climate change, energy, and technology.

Beryl making landfall in Texas.
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Hurricane Beryl, ahem, barreled into America’s Gulf Coast as a Category 1 storm, and whenever something like that happens the entire global energy industry holds its breath. The Gulf of Mexico is not just a frequent target and breeding ground for massive storms, it is also one of America’s — and the world’s — most important energy hubs. Texas and Louisiana contains giant oil and gas fields, and the region is home to about half of the United States’ refining capacity.

At least so far, the oil and refining industry appears to have largely dodged Beryl’s worst effects. The storm made landfall in Matagorda, a coastal town between Galveston and Corpus Christi, both of which are major centers for the refinery industry. Only one refinery, the Phillips 66 facility in Sweeny, Texas, was in the storm’s cone, according to TACenergy, a petroleum products distributor. Phillips 66 did not respond to a request to comment, but Reuters reported that the Sweeny facility as well as its refinery in Lake Charles, Louisiana were powered and operating. Crude oil prices have seen next to no obvious volatility, rising to $83.88 a barrel on July 3 and since settling around $82.84.

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Climate Scored Some Quasi-Victories in Europe

What parliamentary elections in France and the U.K. mean for everyone else.

A voter and wind turbines.
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While America has been distracted by its suddenly-very-real upcoming election, two other important political stories have been unfolding across the pond. The results of last week’s parliamentary votes in France and the United Kingdom have the power to sway global climate policy — and they might even contain lessons for the U.S. about the rise (or fall) of the far-right.

What happened in France?

In June, French President Emmanuel Macron called snap elections, and the far-right National Rally party led by Marine Le Pen was widely expected to achieve a majority in the country’s 577-seat National Assembly. Instead, the New Popular Front, a hastily-formed alliance between the hard left, Greens, and Socialists, came out on top in a runoff, followed by the centrist Ensemble (which includes Macron’s Renaissance party) and the National Rally in a distant third. Because no party won the 289 seats needed to gain control of the chamber, the left and center now have to form a coalition government, which means ideological compromise — something that’s distinctly un-French. “We're not the Germans, we're not the Spanish, we're not the Italians — we don't do coalitions,” one French political commentator toldSky News.

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President Biden.
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In an altogether distressing debate in which climate was far from a main focus, the two candidates did have one notable exchange regarding the Paris Agreement. The 2015 treaty united most countries around the world in setting a goal to limit global warming to “well below” 2 degrees Celsius, with 1.5 degrees as the ultimate target.

After Trump initially dodged a question about whether he would take action to slow the climate crisis, he then briefly noted “I want absolutely immaculate clean water and I want absolutely clean air. And we had it. We had H2O.”

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