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Obama speech on Gulf oil spill and climate change: Why hard cost figures are needed

Few politicians want to debate the real costs of fighting climate change. Will, for example, gasoline be $5 a gallon or not? Perhaps a bill would pass if there were more honesty and openness about the real impact of hiking the price of carbon.

By Clayton Jones / June 16, 2010

President Obama tours the beach at Port Fourcho, Louisiana, with Parish President Charlotte Randolph May 28.

Win McNamee/Pool-CNP-PHOTOlink/Newcom

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In his speech Tuesday about the Gulf oil spill and BP, President Obama came close to asking Americans for a specific sacrifice in dollars and cents to kick their oil habit.

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But he didn’t come close enough.

Few politicians like to be blunt about the actual costs of a climate-change law, especially in a shaky economy with high unemployment. Instead, they prefer the rhetoric of argument – which is often valid but not to Americans who want hard, pocketbook figures.

Here is an example from the Obama speech:

“There are costs associated with this [energy] transition, and some believe we can’t afford those costs right now. I say we can’t afford not to change how we produce and use energy, because the long-term costs to our economy, our national security and our environment are far greater.”

Still, on the same day, the Environmental Protection Agency did release an estimate of the costs of a pending Senate bill on climate change, the American Power Act, sponsored by Sens. John Kerry and Joe Lieberman. The analysis showed a cost of $79 to $146 per year to the average household, or 51 to 95 cents per day, through 2050. Those figures are similar to an EPA analysis of the House climate-change bill passed a year ago, the American Clean Energy and Security Act.

But here is the problem: Other economists using different models see higher costs from these same bills. Some foresee gasoline prices going to $5 a gallon under the bills, for example, and with small impact on global warming. Another study sees a rise in home heating costs by 25 cents per gallon by 2030.

Other disputes can easily flare up in this debate, such as defining what a “green job” is in order to subsidize it, whether the technology to capture carbon emissions from coal-powered plants will ever work, and whether solar, wind, energy-efficiency improvements will ever substitute for coal and oil.

Politicians are shy of talking about hard numbers in raising energy costs become of a political lesson in 1993. Congress voted that year to raise the gasoline tax by 4.3 cents per gallon, with then-Sen. Al Gore casting the deciding vote in the Senate. At the next election, Republicans use that tax hike and other Clinton-era issues to win control of Congress.

The most comprehensive study on the financial impact of fighting climate change was done in 2007 by Sir Nicholas Stern and a team of economists. It found the world’s economic growth rate would be cut about 1 percentage point – a small price to pay for the even larger economic damage from global warming.

But that brings us back to making arguments for action without the financial numbers, the kind that Obama made in his speech. Such persuasion by words isn’t strong enough yet to get the necessary 60 votes for Senate passage of a climate-change bill. Now there is talk of Congress passing a bill after this fall's elections, in November or December, when many lawmakers will be lame-ducks or not up for reelection soon.

Perhaps if Obama were more upfront about the actual costs of such bills, and debated his opponents on the numbers, then support would grow for passage of a bill in coming weeks, when images of the Gulf oil spill are still in the news.

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