One of the biggest questions about climate change is: What will it cost to fix? Figuring that out is a huge challenge.
While most scientists believe that global warming already is happening and that human activity is a main reason, predicting future temperature trends decades, if not centuries, from now remains controversial.
What will be the impact on land, water, natural habitat, and people? What will it take and how much will it cost to prevent or adapt to the effects of climate change? Theories involving risk management and cost-benefit ratios are major factors here.
All of this comes together as politicians look for solutions that aim to get the job done without wrecking the US economy.
The proposed Lieberman-Warner Climate Security Act of 2008, sponsored by Sens. Joseph Lieberman (I) of Connecticut and John Warner (R) of Va., would cap the greenhouse-gas emissions that cause global warming and establish a market-based trading program for companies to meet the cap – a so-called cap-and-trade system. The goal is to lower emissions 63 percent below 2005 levels by the year 2050.
The Environmental Protection Agency (EPA) recently issued its economic analysis of the bill. Not surprisingly, supporters and opponents each found things in it to bolster their arguments. Congressional Quarterly quotes Sen. Barbara Boxer (D) of California, who chairs the Environment and Public Works Committee, as saying:
"When you look at all the scenarios the EPA analyzed, the one that most closely reflects the Lieberman-Warner bill's technology driving policies shows that this bill is a winner for the environment, a winner for our economy, and a winner for the planet."
But the piece also quotes Sen. James Inhofe (R) of Oklahoma, one of the Senate's most vocal critics of global warming, who sees the legislation quite differently:
"Americans will pay significantly more at the pump, in their homes, and in many cases, with their jobs."
Under the Lieberman-Warner bill, US gross domestic product grows 80 percent from 2010 to 2030 – just one percentage point less than projected without the bill. And average annual per-household consumption grows 81 percent over the same period – just two percentage points less than without the bill.
At the same time, the price of electricity would increase 18 percent between 2010 and 2050 under the bill, according to the EPA analysis document.
"EPA's results for the scenario that most resembles the bill confirm what we have seen in every reputable analysis. We can grow our economy and tackle global warming at the same time.... The up-front costs EPA identifies are a sound investment for a strong economy down the road. For clean air, less imported oil, and avoiding the damage of climate change, they are a bargain."
Among its findings: a gross domestic product loss of $151 billion to $210 billion in 2020 and $631 billion to $669 billion per year in 2030; 1.2 million to 1.8 million fewer jobs in 2020, and 3 million to 4 million fewer in 2030; annual household income losses of $739 to $2,927 in 2020 and $4,022 to $6,752 in 2030; electricity price increases of 28 percent to 33 percent by 2020 and 101 percent to 129 percent by 2030; and gasoline price increases of 20 percent to 69 percent by 2020 and 77 percent to 145 percent by 2030.
"This is a sobering report in view of the economic and social costs of action with respect to this legislation."
This is a far different result than other studies. Robert Repetto, an economics professor at Yale University, recently created a website reviewing 25 of the leading economic models that predict the impacts of cutting greenhouse gases. His conclusion: Strong economic growth would continue even under worst-case assumptions.
"... [E]ven under the most unfavorable assumptions regarding costs, the U.S. economy is predicted to continue growing robustly as carbon emissions are reduced.... Under favorable assumptions, the economy would grow more rapidly if emissions are reduced through national policy measures than if they are allowed to increase as in the past."