Climate 411

Yet Another CBO Study Shows Small Costs of Clean Energy Legislation

The Congressional Budget Office (CBO) just released another report showing that the costs from clean energy legislation would be small – and could help America avoid the severe economic impacts of climate change.

The report, “The Economic Effects of Legislation to Reduce Greenhouse-Gas Emissions,” is based on other previous analysis.

Here are some of the CBO’s main findings:

  • Without policies to reduce carbon pollution, climate change will have negative and possibly severe economic impacts on the United States.
  • With legislation including a cap on carbon pollution, the cost to consumers will be modest, and in line with previous independent estimates.
  • Low-income families (the lowest 20 percent of households) would see purchasing power riseas a result of the House-passed clean energy bill, thanks to the allocation provisions. Higher income households would see a very small increase in costs.
  • The reduction in household purchasing power, taking into account compensation from the allocation provisions, would amount to 0.1-percent in 2012 and 0.8-percent in 2050, with an average of 0.4-percent over the period 2012-2050.
  • Nationally, the House legislation would reduce the U.S. gross domestic product (GDP) — relative to the no-policy scenario —  by 0.2 to 0.7 percent in 2020; 0.4 to 1.1 percent in 2030; 0.7 to 2 percent in 2040; and 1.1 to 3.4 percent in 2050. At the same time, real GDP is projected to be roughly two and a half times greater in 2050 than today under either scenario. (Note that taking no action would also reduce GDP growth, perhaps to a much greater degree, because of the impacts of climate change.)
  • Annual U.S. economic growth between 2010 and 2050 would be reduced by 0.03 to 0.09 percentage points, relative to a business-as-usual growth rate of 2.4 percent. (Again, this “business as usual” estimate assumes a fictional world in which climate change does not occur.)

An earlier CBO analysis [PDF] of the House clean energy bill found it would cost the average American household about as much as a postage stamp per day. Other analyses by the Environmental Protection Agency and the Department of Energy found similar results.

This is the fourth study to confirm the same conclusion (other ones: EPA [PDF], CBO [PDF], EIA, ) – America can afford to pass legislation that will make us more energy independent and will help fight climate change.

In fact, we can’t afford not to.

Posted in Economics / Comments are closed

Friedman: Solar Panel Boom Is Getting Away from U.S.

Today’s New York Times includes a fine column by Thomas Friedman, in which he explores the exploding solar panel industry. He finds to his dismay that it’s all overseas. He concludes, “So, if you like importing oil from Saudi Arabia, you’re going to love importing solar panels from China.”

We’ve been saying this for years, and it’s still true: The best way to create clean energy jobs right here in the U.S. is to cap global warming pollution. Here’s more on how a cap will create jobs.

Posted in What Others are Saying / Read 1 Response

More Fuzzy Math on the Costs of Climate Legislation

For those of you wondering what the story is with a Treasury Department document that purports to estimate the cost of climate legislation: it doesn’t.

The Treasury Department analysis simply quantifies the potential revenue from a hypothetical auction of all pollution permits under a cap and trade bill.

Opponents of climate change legislation are now firing up the fuzzy math machine again, dividing that figure by the number of people in the country and concluding that cap and trade will mean high costs for households. Sound familiar? That’s how House Minority Leader John Boehner arrived at his roundly dismissed $3,100 figure.

It’s a flawed analysis of a non-existent proposal.

Even if a 100 percent auction was a live legislative proposal, which it’s not, that math ignores the redistribution of revenue back to consumers. It only looks at one side of the balance sheet. It would only be true if you think the Administration was going to pile all the cash on the White House lawn and set it on fire.

The bill passed by the House sends the value of pollution permits to consumers, and it contains robust cost-containment provisions. Every credible and independent economic analysis of the American Clean Energy and Security Act (such as those done by the non-partisan Congressional Budget Office, the Energy Information Administration, and the Environmental Protection Agency) says the costs will be small and affordable — and that the U.S. economy will grow with a cap on carbon.

For more info on what well-designed cap and trade legislation will actually cost, please visit

Posted in Economics / Read 1 Response

Full Analysis of National Manufacturers Association’s Flawed Study

I promised earlier today in my quick review of the flawed study from the National Association of Manufacturers that a full analysis was on the way. Here it is [PDF].

The analyis concludes, as I said this morning that “assumptions matter — and unrealistic assumptions make for outlandish results.”

Posted in Climate Change Legislation, Economics / Comments are closed

More Manufactured Numbers from the National Association of Manufacturers

The National Association of Manufacturers and the American Council for Capital Formation today continued their campaign of public deception against the American Clean Energy and Security Act with the release of an analysis that purports to show manufacturing declines and job losses if the bill passes.

Problem is, NAM’s numbers are about as trustworthy as the forged letters sent by their allies to members of Congress, which faked opposition to the ACES bill from local community groups. They are no more real that the Birthers’ imaginary Kenyan birth certificate for President Obama, which names a laundry detergent as the registrar. (Really.)

As you know, NAM has a long history of opposing virtually every major environmental law, often using similar bad arguments with flawed data. NAM/ACCF’s study from last year was seriously flawed – it claimed to look at that year’s Lieberman-Warner bill, but it ignored important provisions of the legislation and imposed artificial constraints on the economy’s ability to reduce emissions.

The analysis presumed there would be no banking of emission allowances and only limited use of offsets. The study also artificially constrained the use of renewable energy and carbon capture and storage.

In short, they applied make-believe assumptions to a make-believe bill, and they are doing it again:

  • NAM/ACCF’s conclusions assume that ACES will spur 10 to 25 GW in new nuclear power. Compare that to the Energy Information Administration’s base scenario, which predicts 10 GW without the bill – and as much as 95 GW with the bill.
  • NAM/ACCF assumes that 95 percent of cost-saving offsets will come from domestic projects and five percent from overseas. In fact, ACES provides for a 50-50 split between domestic and international offsets, and the latter are expected to be more cost-effective.

These are but two questionable assumptions from the very few that NAM and ACCF disclosed – from a model with a huge array of inputs. No one will ever know exactly how they reached their numbers, because important details about their analysis and underlying assumptions remain in a black box.

We’ll have a more detailed rebuttal to NAM/ACCF’s claims for you later today.

In the meantime, here’s what we already know from independent, transparent analysis:

  • The Energy Information Administration says the cap on carbon pollution in ACES can be achieved for $83 per year per household – or a dime a day per person. One of the reasons for the affordability is that increases in electricity and natural gas bills of consumers are substantially mitigated through 2025 by the allocation of free allowances to regulated electricity and natural gas distribution companies.
  • The Congressional Budget Office found [PDF] that ACES would cost the average household $175 a year by 2020, or about the cost of a postage stamp per day. The CBO also found that the poorest 20 percent of American households would actually see a net cash gain under the bill of about a $40 in 2020. The study factored in the value of emissions allowances that will be rebated to consumers.
  • The Environmental Protection Agency puts the cost of a carbon cap on at $88-$140 per household per year over the life of the program – or about a dime a day per person. (Sound familiar?)
  • The Energy Information Administration (see above) also says that ACES would reduce our dependence on foreign oil. The U.S. would reduce its consumption of oil by 344 million barrels in the year 2030 alone, a cut of more than 12 percent from predicted imports for the same year without the bill. To put that figure in perspective, 344 million barrels of oil are worth almost $26 billion today.
  • The United States Global Change Research Program found that America will face hundreds of billions of dollars in costs if we don’t take steps to stop climate change. The cost of inaction will include: sea level rise of as much as two feet that will destroy property along our coasts; stronger hurricanes and other storms that will damage cities; and severe droughts that will devastate agricultural sectors.
Posted in Climate Change Legislation, Economics / Read 1 Response

National Security: Climate Bill Protects America

Sometimes, national security is not just a matter of having a larger army, or superior weapons, or better intelligence. It also means preserving political stability around the world, and spreading economic prosperity as widely as possible.

Instability encourages ideological extremism, and poverty provides a steady supply of terrorist recruits, which can directly affect U.S. security. From Afghanistan to Somalia, we’ve seen how weak states and economic hardship can lay the foundation for political crisis and war.

Many military leaders say global warming poses a grave threat to our security, precisely because it will promote economic instability and political unrest around the world. Former Republican Sen. John Warner, a staunch and highly respected supporter of the U.S. military, strongly supports action on climate change, in part for national security reasons. Read Senator Warner’s recent testimony supporting U.S. leadership in reducing greenhouse gas emissions. [PDF]

Climate change is what military analysts call a “threat multiplier,” meaning it will intensify problems that already threaten us. Here is what a world with an unstable climate might look like:

  • We’ll see more crop failures and drought, famine, and disease, leading to mass migrations of people across borders
  • Scarcity will cause more frequent wars over natural resources, such as water.
  • A sea level rise of three feet – near the low end of predictions for 2100 – would create 100 million environmental refugees around the world.

To make matters worse, much of this will happen in volatile regions already on the brink.

Don’t take our word for it. Here’s what military leaders and experts say:

  • In a recent report, eleven retired U.S. admirals and generals cited that growing instability from climate change is leading to greater U.S. military operations abroad. Among them were Gen. Gordon Sullivan, former Chief of Staff of the United States Army, and former Marine Corps Gen. Anthony Zinni. According to Sullivan, “We have to act now [on global climate change] if we are to avoid the worst effects.”
  • Likewise, the bipartisan Center for Strategic and International Studies (CSIS) has issued a report on the national security impacts of climate change [PDF] predicting that global warming will produce “heightened internal and cross-border tensions caused by large-scale migrations; conflict sparked by resource scarcity, particularly in the weak and failing states of Africa; increased disease proliferation, which will have economic consequences; and some geopolitical reordering as nations adjust to shifts in resources and prevalence of disease.” Among the authors was James Woolsey, former director of the CIA. The board of CSIS includes former National Security Advisors Henry Kissinger, Zbigniew Brzezinski, and Brent Scowcroft.
  • Finally, the National Intelligence Council completed the first-ever National Intelligence Assessment of climate change last year. Although the report is classified, the chairman of the Council summarized key findings before a Congressional committee: “We judge global climate change will have wide-ranging implications for U.S. national security interests over the next 20 years.” [PDF]

The climate bill now before Congress will help avert widespread and dangerous environmental changes that would lead to global instability, by cutting greenhouse gas emissions 83 percent by 2050. Another benefit will be reducing our reliance on imported oil. The U.S. has five percent of the world’s oil reserves but consumes 25 percent of the world’s oil. Much of the world’s oil comes from the Mideast, a focal point of political instability and extremism, making reduced dependence on imported oil a national security imperative. By moving the U.S. toward cleaner energy sources like wind and solar, the climate bill will reduce our reliance on fossil fuels like oil.

Many of the nation’s top military leaders and foreign policy experts are calling global warming a national security threat, as well as a critical environmental threat. Congress needs to avert this coming crisis by passing the climate bill.

Posted in Climate Change Legislation / Comments are closed