# Climate damage accumulates, while clean energy offers a path forward

Markdown copy of https://realalpha.app/s/climate-damage-accumulates-while-clean-energy-offers-a-path/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Paul Krugman](https://realalpha.app/people/paul-krugman/) · Paul Krugman is a Nobel Prize-winning economist and distinguished professor of economics at CUNY.
- Host: [Ed Elson](https://realalpha.app/people/ed-elson/)
- Host: [Scott Galloway](https://realalpha.app/people/scott-galloway/)
- Show: Prof G Markets
- Episode: [The Economic Risks Keeping Paul Krugman Up at Night | Prof G Markets](https://realalpha.app/v/DQFkezP6qSg/), Dec 5, 2025
- Moment: 39:38 to 45:34 of the episode (6 min), playing on https://realalpha.app/s/climate-damage-accumulates-while-clean-energy-offers-a-path/; the episode from there: https://realalpha.app/v/DQFkezP6qSg/?t=2378

## Quote

> “a persistent **150 basis point rise** in the rate of productivity growth in the United States would make a lot of our economic problems just melt away.”
> — [Paul Krugman](https://realalpha.app/people/paul-krugman/) at [41:18](https://realalpha.app/v/DQFkezP6qSg/?t=2478) · Prof G Markets

## Takeaways

1. Even stopping emissions would not quickly reverse warming.
2. He avoids Florida real estate because he expects substantial damage.
3. A 1.5-point productivity-growth increase could ease economic problems.

## About this segment

Paul Krugman warns that greenhouse-gas effects build over time, making future property and economic damage likely. He also sees cheap clean energy and faster productivity growth as meaningful ways to improve the outlook.

From “The Economic Risks Keeping Paul Krugman Up at Night | Prof G Markets”, Dec 5, 2025. [Watch the full episode](https://realalpha.app/v/DQFkezP6qSg/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[39:50](https://realalpha.app/v/DQFkezP6qSg/?t=2390) Of all the things going on, all the risks, whether it's geopolitical instability, deficit spending, AI, potentially an AI bubble, what worries you the most? Do you think it's not getting enough coverage? And then outline a scenario around the question we like to ask, what could go right? environmental issues are, you know, should be top of the concern. And there's a terrible thing that's happening right now, which is that we've reached a moment when the technology actually makes It's surprisingly easy and cheap to do a lot to limit climate change.

[40:24](https://realalpha.app/v/DQFkezP6qSg/?t=2424) And the United States is just totally turning its back on this miraculous technology, which also has geopolitical stuff. China is taking the lead in green energy, and the United States is keeping defunct coal plants running. So that's what really scares me. Now, what could go right? You know, maybe AI really does generate a huge productivity burst, you know, and you can believe both that it's a bubble and that the companies, you know, the Mag-7 or the Mag-10 or whatever your group is, that they are massively overvalued and that the technology is really going to be transformative.

[41:06](https://realalpha.app/v/DQFkezP6qSg/?t=2466) It's like, you know, I spend time watching old ads from the 90s on YouTube. It's one of those great, well, technology does some great stuff. And you look at the ads from Quest about all the wonders that fiber optics was going to bring. And they all came true. Quest got bankrupt. But, you know, the technology was for real. And it could, you know, if a persistent 150 basis point rise in the rate of productivity growth in the United States would make a lot of our economic problems just melt away.

[41:40](https://realalpha.app/v/DQFkezP6qSg/?t=2500) I'm surprised to hear on the top of your list in terms of risk, you're worried about environmental issues. When we ask the question, the things that often come up are debt is often a really big one. Civil war in some capacity, largely as a result of inequality, the steepening inequality that we're seeing is often a big one. I think that's probably number one for me. I'm surprised to hear environmental issues. I'd like to hear more about that.

[42:11](https://realalpha.app/v/DQFkezP6qSg/?t=2531) So let me just say, I wasn't going to get into the politics, but no, I mean, my immediate concern, to ask what keeps me up at night, it's will America still be a democracy next year? Not even so much the civil war aspect as the, you know, we've seen this movie before. We're like quite a lot like Orbán's Hungary and at a couple of, you know, a year or two into the Fidesz takeover. So, you know, that's what keeps me up at night. I'm not sure about the Civil War. More about just— basically an authoritarian coup. Let's just be frank about it. If you're not worried about that, you're not paying attention. And that is, you know, we probably still have some running room on that. So, you know, that will get resolved first. But the environment, look, the world is still emitting a lot of greenhouse gases. The thing about greenhouse, about emissions is that

[43:14](https://realalpha.app/v/DQFkezP6qSg/?t=2594) they're cumulative. It's, it's, uh, even if we stopped completely, uh, emitting carbon dioxide and methane today, um, temperatures wouldn't start to come back down for generations. So this stuff, and if we continue, uh, you know, slowing the rate of growth of emissions, which is kind of, of the most that we can reasonably hope for right now is not enough to avoid a, really large set of consequences. So, you know, I don't own any real estate in Florida because I don't think, I think that the, you know, just in economic terms, we are very likely to see a whole lot of property damage and economic damage. So this stuff has receded from attention, but the reality continues. Why do you think it's receded from attention? I agree with you this was sort of top of top of mind for many many people i would say maybe seven eight

[44:13](https://realalpha.app/v/DQFkezP6qSg/?t=2653) probably a decade ago and for whatever reason we've forgotten about it or at least it's certainly way down on the priority list why do you think that's happened well if i think about myself and my friends uh it's because um the we may suffer really terrible environmental damage 10 15 years from now but uh america as we know it politically is on the line now you focus on on the the most immediate danger and that's uh yeah and it's also you know the fact that that the political you know who who are you talking to i mean is is there anybody certainly in in uh in u.s politics who is going to be moved by um by what was said or wasn't said at the cop conference in belain the day, right? You kind of work with where you are. And I will say also, more positive, the fact that it looks like there is a path towards stabilizing the climate at a still

[45:17](https://realalpha.app/v/DQFkezP6qSg/?t=2717) tolerable level without sacrifice because of these miraculous. new green energy technologies, that also does change the way that you think about it. Just before we let you go here, more of a personal question. You were a columnist for