October 17, 2021, by David P. Chassin, SLAC National Accelerator Laboratory
Most of us have heard the advice that we should start saving for retirement early, and save as much as possible. You might wonder whether that advice makes any sense given the growing uncertainties about the future, especially regarding the impact of climate change. If the future is so uncertain, then saving money you might never get to spend doesn't really make very much sense.
Still, the primary long-term concern of most Americans is retirement. Most of us plan for our later life by saving and investing money long-term to ensure that we will be comfortable and self-sufficient. But climate change is casting a dark shadow over those plans, especially for the younger generations who have a long way to go before retirement. So the question is whether saving as much money as possible is really the best way to prepare for retirement? Are there better strategies we could follow that would both yield better returns for both ourselves individually and reduce the risks that climate change presents to us all?
Climate change can have an adverse impact on our comfort and well-being, even after a lifetime of hard work serving our communities, raising children, and saving money. No matter how much money you have saved, you could still lose everything after a single severe weather event. Severe weather events can make our retirement years much more difficult, dangerous, and expensive than we might expect based on the experience of our parents and grandparents. These severe weather events are mainly driven by the rising global average temperature.
How much global average temperature change will you experience when you retire?
As a result of this temperature we have seen a significant increase in extreme weather events that affect older people.
So how much worse will it be when you retire if we don't reduce carbon emissions significantly?
Let's assume your birth decade is
.
How can I consider climate change in preparing for retirement?
Climate change is a global phenomenon. There is no place on the planet you can go to avoid it in the long run. The only way to avoid the impact of climate change is to avoid climate change itself. This is achieved by reducing our individual carbon emissions.
How much you can contribute to reducing total carbon emissions by the time you retire depends on your age. The average American is responsible for 60 tons of CO2 per year (source: Nature Conservancy), which is about 4 times the global average. So the decisions every American makes today have a greater impact on the outcome than anyone else in the world. The younger you are, the more your decisions will make a difference in the long run.
Addressing climate change is just like saving for retirement. The earlier you act, the more positive impact you can have on the outcome. But you have to make important choices about how you're going to act. Some of the choices involve things we all take for granted in our everyday lives. If we think about these at the same time we think about saving for retirement, we can make better decisions now that will make our future more comfortable, safe, and secure.
Consider the following facts (source: US EPA) and answer the questions as they relate to your everyday life. If you don't know the answer to a question, then your answer is probably "no".
Carbon emissions from residential and commercial sources accounts for about of your total carbon emissions.
It's hard to say how much you save when you newer efficient electric appliances instead of old gas appliances. You might save as much as $ in energy and water bills by the time you retire. However, if you do upgrade to electric appliances you might have to also upgrade the electrical panel in your home and that could cost about $5,000.
Does your home have only electric appliance?
Transportation accounts for about of your total carbon emissions.
The total savings of owning electric cars until you retire is about $,000 (source: Consumer Reports).
Do you commute to work in an electric vehicle?
.
Electricity generation accounts for about of your total carbon emissions.
The long-term savings of choosing a 100% renewable tariff varies widely depending on where you live (source: OpenEI). Assuming you save $100 a year (about 10% of the average electric bill), your savings from choosing 100% renewables by the time you retire could be about $,000.
Does your electricity come from renewable sources?
Consumer products accounts for about of your total carbon emissions.
Producing and transporting 1 ton of the stuff you buy results in 6.3 tons of emissions (source: Columbia Climate School). However, changing what you buy probably doesn't change how much you spend.
Do you buy products from local sources that use zero-emissions processes?
Agriculture accounts for about of your total carbon emissions.
Fertilizer and transportation use fossil fuels. Livestock emit methane gas, which is a very potent greenhouse gas compared to CO2 (source: US EPA). Organic food costs more, but eating less meat saves money. Overall it's a wash.
Do you buy food that is organically grown and avoid eating meat?
The following table summarizes your total savings at retirement and the impact on climate change if everyone your age followed the same strategy. (The check boxes allow you to explore alternatives).
Table 1: Impact of your age group's choices by the time you retire