RALEIGH – Imagine that a special North Carolina committee asked you to estimate the costs and benefits of adopting state regulations to combat climate change. Set aside for the moment your understanding of or opinions about the extent of recent and projected global warming and its causes. Doesn’t matter.
If you were going to study the costs and benefits of requiring higher energy efficiency, mandating alternative fuels, levying new taxes and fees, increasing transit spending, or any other policies intended to halve North Carolina’s carbon-dioxide emissions by 2020, would you do any of the following?
• Assume that increasing the cost of energy would have no effect on the costs of producing goods and services in the state.
• Assume that higher energy prices would have no affect on household budgets and the decisions of North Carolina consumers.
• Place no numerical value on the benefits of the policy – lower emissions=lower temperatures=something desirable – so that they can be compared against the costs.
• Count only the jobs created by new spending programs without also counting the jobs lost by increasing taxes to pay for those spending programs.
As you might have guessed by now, I’m not simply pulling preposterous ideas out of the air here. These are key elements of the “cost-benefit analysis” that Appalachian State University’s Energy Center and the Pennsylvania-based Center for Climate Strategies performed for official panels advising North Carolina state government on climate-change policy. For months, my John Locke Foundation colleagues have sought to discover and report what CCS and ASU analysts were doing at the behest of your state government. For months, these groups have hidden in the shadows, camouflaged their policy views, and stonewalled requests for information. Now we know why.
Remember when your math teacher required you to show your work? There’s a good reason for it. In this case, thanks to diligent spade work by Carolina Journal and careful analysis by economists at Suffolk University’s Beacon Hill Institute, it has become glaringly obvious that the “experts” consulted by state officials have no earthly idea what they are talking about.
As Dr. Ben Powell, an economist at Suffolk, put it in his peer review of one of the North Carolina reports, it “fails to perform the most basic task of any cost-benefit analysis – quantifying both the costs and benefits in monetary terms so that they can be directly compared. It mistakes costs for benefits. And astonishingly, it finds net economic benefits from policies intended to reduce greenhouse gases, even without counting the value of those reduced emissions.”
Powell was being polite. The work done by CCS and ASU was garbage. Yet it received mostly uncritical coverage by news organizations across the state. And too few members of the state committees charged with formulating North Carolina’s policy on climate change – one created by the legislature and the other by the executive branch – have raised few objections to the shoddy quality of the research supposedly conducted on their behalf.
The irony here is that global-warming alarmists are fond of using assertions about expertise and consensus as clubs to beat their critics over the head. Unless you are an atmospheric scientist, you aren’t supposed to express even an opinion about the assertions of, say, Al Gore or the filmmakers behind The Day After Tomorrow. And when scientists do, indeed, step forward to question the supposed consensus about an impending global catastrophe, the alarmists attempt to assassinate their character or compare them to Flat-Earthers. Only the minority of scientists who subscribe to the entire alarmist agenda are said to be credible.
Well, what’s sauce for the goose is sauce for the gander – no matter how much he may squawk. Whenever anyone claims that North Carolina should adopt regulations, taxes, and spending programs to combat global warming, and that the result will boost the economy and make North Carolinians better off in the future, check to see if the speaker is an economist trained to employ mainstream economic science. If not, you are permitted to respond with ridicule and contempt. When it comes to evaluating the costs and benefits of such policies, only economists need apply. Earth scientists lack the expertise. Physicists lack the expertise. And scruffy graduate students whose major qualification is an earnest feeling of moral superiority lack the necessary expertise, too.
The best available evidence suggests that, regardless of the extent and causes of recent warming trends, the new regulations, taxes, and subsidies advocated by climate-change alarmists will have no discernible effect on temperatures but a large, adverse effect on economic growth and household incomes in North Carolina. It would be all pain, no gain.
Hood is president of the John Locke Foundation.