Why are Congress’s budget experts failing to address the rise of climate-related health care spending?

Beyond its role of scoring the budgetary and economic effects of proposed legislation, the Congressional Budget Office (CBO) independently publishes reports and working papers addressing more than two dozen topics intended, in part, to enhance the office’s transparency and encourage external review and comment. Under the topic of “climate and the environment,” the CBO has since 2015 published nine reports, the two most recent from last December addressing transportation and electric power sector greenhouse gas (GHG) emissions.

It is remarkable, however, that the CBO has yet to publish a single report on the effects that the climate crisis has on federal health care spending, for at least two obvious reasons.

From an anthropocentric perspective, the climate crisis is fundamentally a threat to human health and survival. The CBO’s April 2021 climate and environment report, “Budgetary Effects on Climate Change and of Potential Legislative Responses to It,” recognized that climate-related Medicare and Medicaid costs are “expected to rise” as beneficiaries “experience more cases of illnesses related to heat exposure, air pollution, or [sic] vector-borne diseases.” In truth, these costs are already rising.

Second, when federal budget issues are discussed, the government is largely thought of as a giant insurance company with an army. Health care constitutes a significant percentage of federal spending, at approximately 30 percent, and nearly 90 percent of this spending is mandatory.

The reason the CBO has never published a climate crisis-related health care spending report or one estimating future health care budgetary savings resulting from climate mitigation is that, as the 2021 report states, the CBO “currently has no basis for estimating the extent to which the up-front costs of such [mitigation] policies might lead to future budgetary savings, because many of the linkages between climate change and the federal budget require additional information and analysis.” This statement is predicated on the belief that “investments in mitigation … could result in future savings to the federal budget if the policies were effective.”

The CBO believes the way the federal government could mitigate climate crisis-related health effects is to reduce the rate of greenhouse gas emissions, or, as the report states, “slow its pace” or “reduce the extent of or pace of climate change.” The report specifically defines climate mitigation as “reducing the extent or pace of climate change.”

This presents a significant problem because the CBO is wrong on both counts. There does exist a sound basis for estimating budgetary savings; however, mitigating the climate crisis by reducing the extent or pace of GHG emissions is not a solution.

Both the basis for estimating climate-related budgetary health spending and mitigation savings is found in a basic law of physics: the conservation of matter.

In their seminal 2007 paper, MIT’s John Sterman and Harvard’s Linda Sweeney demonstrated that even among the highly educated — their study involved MIT graduate students — there is a dramatic failure to understand climate physics. This leads organizations like the CBO to falsely believe the climate crisis can be quickly solved, which in turn allows the CBO to take a “wait and see” approach.

In their paper, subtitled “Adults’ Mental Models of Climate Change Violate Conservation of Matter,” Sterman and Sweeney explain that it is a fantasy to believe that reducing “the extent of or pace of” GHG emissions will cause a drop in atmospheric GHG concentrations and consequently a drop in mean temperature. Since matter is conserved, it can neither be created nor destroyed, even if the rate of GHG emissions fall GHG concentrations will continue to rise.

Sadly, we are a long way from achieving net zero emissions; anthropogenic GHG emissions are more than double removal. Rising GHG emissions means continuing rising temperatures. Defined alternatively as a stock and flow problem, the analogy here is a bathtub filling with water. To believe slowing the extent or pace of GHG emissions mitigates the climate crisis would be to believe a bathtub filling faster than it drains will never overflow. To believe such violates the conservation of matter.

Explained another way, the CBO supplants fundamental stock and flow reasoning with false pattern matching. The CBO believes temperature tracks with emissions. Therefore, lowering emissions reverses warming and resultant health harms. This is false because, again, the bathtub is still filling. As Sterman and Sweeney analogize, the nation’s debt falls only when the government runs a surplus. The “nation’s debt rises as long as its fiscal deficit is positive,” they wrote, “even as the deficit falls.”   

The CBO’s understanding of and solution for climate change that rationalizes its “wait and see” approach is additionally problematic because, correctly understood, climate crisis effects cannot be quickly reversed as the CBO believes. This is because the climate crisis exhibits long delays between incremental changes in atmospheric GHG concentrations and net radiative forcing — the difference between the amount of energy that enters the atmosphere and the amount of energy that leaves. (The net amount of the sun’s radiative energy the planet retains doubled between 2005 and 2019.) Beyond the Earth’s increasing energy imbalance, the climate crisis also presents a highly dimensional, dynamic system with multiple feedback loops and nonlinearities.

Calculating the consequences of climate crisis effects on health care spending and related budgetary savings from mitigation efforts is determinative. The laws of physics make this so. There is little or no doubt appropriate mitigation investments can result in federal budgetary savings if federal policymakers work at least to prevent the bathtub from overflowing or, for example, worked to prevent mean temperatures from reaching 1.5 degrees Celsius. The CBO could start by reviewing the Medical Society Consortium on Climate and Health’s 2021 report that estimated climate crisis-related health care costs at well over $820 billion annually.

The CBO would be wise to recognize that our economy is entirely a subsidiary of nature, not the other way around.

David Introcaso, Ph.D., is an independent health care policy consultant specializing in climate crisis-related health care policy reform. He has conducted environmental and health care policy research for the U.S. Congress and the Department of Health and Human Services. He also is the creator and host of “The Healthcare Policy Podcast.”