Senate weighs cost of acting, and not acting, on emissions
It doesn't come down to polar bears, it comes down to cost – and while the cost of acting is steep, the cost of inaction appears to be steeper, experts say.
For those who think the battle over US carbon emissions legislation is already in full swing, this past week was a reminder that it's just beginning. The central debating point: the numbers.Skip to next paragraph
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How much will it cost American taxpayers to curb US carbon-dioxide emissions? Or, conversely, how much would it cost to just drop the blinds, turn up the air conditioner, and not do much at all? The answer to the question of economic impact - far more than the issue of polar-bear survival - will determine the outcome of the climate bill battle, political observers say.
On May 20, government witnesses told the Senate Energy and Natural Resources Committee how much the leading climate change legislation - the Lieberman-Warner bill (also known as "America's Climate Security Act") - is likely to cost the US economy in terms of economic growth:
• As much as 3.8 percent of the Gross Domestic Product (GDP) - about $983 billion annually - under a high-cost scenario that cuts CO2 emissions by 40 percent by 2030, according to the Environmental Protection Agency. The consensus among climate scientists is that the US and other nations need to cut their emissions by 80 percent by 2050 to avoid the worst effects of climate change.
• By as little as 1 percent of GDP - $64 billion per year, on average - between 2010 and 2030, the Energy Information Administration reported.
• Some $669 billion annually by 2030 and the loss of 3 million to 4 million jobs, says a study unveiled this month by the National Association of Manufacturers (NAM).
"Any way you look at it," said Keith McKoy, a NAM vice president, in a statement, "Lieberman-Warner will result in major disruptions of our economy, soaring energy prices, and millions of lost jobs. "The urge to do something without a thorough and thoughtful analysis must be resisted."
But inaction also has a cost.
A 2006 British study by Nicholas Stern, who heads that nation's Government Economic Service, estimated the global cost of doing nothing would at 5 to 20 percent of the world's annual gross domestic product - similar to the impact of a major world war or economic depression.
On May 23, two Tufts University economists detailed the cost to the United States alone of inaction on climate. Overall, they estimate the impact at about 3.6 percent of GDP - an enormous hit - by the year 2100. In the "business as usual" scenario, hurricane damage, real estate losses, higher energy costs, and fresh-water demands alone would cost the nation about 1.8 percent of its annual GDP, or about $1.9 trillion each year by 2100.