RALEIGH – A new study from the Environmental Protection Agency about the economic impact of global-warming legislation is making headlines and drawing praise from the sponsors of the bill in question – Sens. Joe Lieberman and John Warner – as well as from climate-change alarmists. Why? Because the study doesn’t forecast economic devastation if a cap-and-trade system for carbon dioxide is put in place.
Good. If they’re willing to accept this EPA study as valid, it will serve to undercut many of their talking points. It is, in many ways, a sort of “best-case” scenario for carbon-dioxide regulations, and it remains not a particularly good case.
First of all, because alarmists embrace this study, they can no longer deny the obvious. Enacting such a bill will significantly raise the price of electricity and the cost of driving automobiles – which will remain, everyone grants, the primary means of personal transportation for many years to come. The study estimated a 44 percent jump in electric bills by 2030 and a 53-cent-per-gallon rise in gas prices at the pump. Overall, households would lose about $4,400 worth of buying power by 2050.
A lower-carbon lunch isn’t free, in other words.
To weigh against this cost is the purported benefit of reducing greenhouse-gas emissions by half of what they would otherwise be by mid-century. This sounds significant until one remembers that, according to the available models, such a reduction would have little real effect on average global temperatures. That non-free, lower-carbon lunch offers little in the way of environmental nutrition.
Another point to consider is that in order to make even these projections add up, EPA had to assume a huge increase in nuclear-power generation. I’m all for it, but many environmental activists aren’t. They prefer to emphasize solar, wind, geothermal, biomass, and conservation as the ways to replace baseload power from coal-fired plants. I’m as optimistic as the next person, and would love to see next-generation solar-thermal plants play a significant role, for example. But these notions are speculative, at best. And for conservation to play a bigger role in the model would require electricity and gas prices to be far higher than they are now, in order to motivate consumers. Most activists don’t like to say that, but it’s the reality. Again, to justify such a government-imposed reduction in household income – call it a tax increase, for short – would require clear evidence of a significant benefit. It’s not there.
If the EPA’s assumption about the rebirth of nuclear power turns out to be wrong, then the cost of cap-and-trade will be worse than its current estimates suggest. Indeed, there is good reason to believe that enacting the proposed Lieberman-Warner bill would eliminate millions of American jobs over the next two decades. It’s not a price worth paying.
Hood is president of the John Locke Foundation.