Climate and the $3,100 Lie Detector

How can you tell when a politician in Washington isn't telling the truth? When they claim that the cost of capping carbon emissions and reducing foreign oil dependence will cost American families "$3,100."

It's become Talking Point Number One for opponents of action on climate change. Problem is, it's entirely made up — so don't get fooled. Ask where that number comes from.

The claim that carbon cap legislation proposed by Reps. Henry Waxman and Ed Markey will cost families "$3,100" was first made in a March press release from the National Republican Congressional Committee. The NRCC said its number was based an MIT analysis of cap and trade legislation.

Here's what John Reilly, the author of the MIT study, told Politifact about the NRCC's claim: "It's just wrong. It's wrong in so many ways it's hard to begin."

In two recent letters to House Republican Leader John Boehner, MIT's Reilly asked that the NRCC stop using the "misleading" figure, noting that MIT's estimates are less than one thirtieth of what the NRCC is claiming. "A correct estimate of that cost … for the average household just in 2015 is about $80 per family, or $65 if more appropriately stated in present value terms discounted at an annual 4% rate," he said.

Reilly also pointed out that the MIT study is an "old analysis that is not well calibrated to either current legislative proposals or US economic conditions." That's important because the legislation now under debate in the House is expected to take further steps to ease cost impacts on consumers.

So why do Rep. Mike Pence and other opponents of cap and trade keep saying it will cost thousands? Either they are ignoring every credible analysis, or they're very bad at math.

If they cite a study claiming astronomical costs, be sure to ask three key questions:

  1. Does the author of the study agree with the claims about their analysis?
  2. Does the analysis actually look at the current legislation under debate?
  3. What do the most recent, credible, and unbiased analyses say?

According to a new EPA analysis of the Waxman-Markey climate bill (the American Clean Energy and Security Act), an ambitious cap on carbon pollution can be met for as little as $98 per household per year over the life of the program – or about a dime a day per person.

In the early years the costs are even lower: Before 2012 it is zero — because the bill won't have taken effect. By 2015, the costs "skyrocket" to 2 cents per person. Anyone who claims that now is the wrong time to cap carbon is engaging in scare tactics.

EPA's analysis sets the gold standard by using two of the most credible, transparent, and peer-reviewed economic models available. It's not a crystal ball, but it shows clearly that household costs will be modest under a well-designed cap and trade bill.

This entry was posted in Climate Change Legislation, Economics. Bookmark the permalink. Both comments and trackbacks are currently closed.

3 Comments

  1. Peter Torbay
    Posted May 10, 2009 at 12:24 pm | Permalink

    Tony, you are being totally disengenuous.

    The EU proposes $10 per tonne of CO2 equivalent. America produces 30 BILLION metric tonnes of CO2 equivalent in 2007. That's $300 BILLION dollars in CC&T taxes for 2007, divided by 150,000,000 working Americans, or $2,000 per year per working adult, according to the CC$T tax model.

    Competition for carbon credits could push that higher.

    Now comes Washington State proposing a CC$T annual vehicle relicensing fee of $425. The average family owns 2 or more vehicles, therefore the annual cost of CC&T for Washington State will be $850 per family, at a minimum.

    Wait! There's more!!

    Washington State is also proposing a CC$T sales tax on all goods and services, based apparently on non-renewable energy production cost, presumably, although there is no benchmark, and the entire sum of CC$T sales tax revenues will be rolled into more ecology white papers, 'research' and more Department of Ecology staff hiring. The WA CC$T GST will exceed $350 per year per taxpayer, that's the budget shortfall bridge State says it needs to develop!

    Hmmm, $2000 + $850 + $350 = $3200 CC$T per person per year

    Those numbers are UNEQUIVOCAL.

    Junk science becomes junk politics, lying to the People, that's how desperate the Inconvenient Truth Movement is.

  2. Posted May 11, 2009 at 8:48 am | Permalink

    It does impress already that politician doesnt tell the truth. That is no news. What mean the sales tax on all goods ans services? Our life become more and more expensive, soon we cant pay for it.

  3. Posted January 9, 2010 at 11:10 pm | Permalink

    This has been really interesting but how do I bookmark this? I tried Digg but do I have to sign up first?

One Trackback

  • About this blog

    Expert to expert commentary on the science, law and economics of climate change and clean air.

  • Get blog posts by email

    Subscribe via RSS

  • Categories

  • Meet The Bloggers