Paul Krugman of The New York Times calls our attention to the facts of a Chamber of Commerce report on the costs of President Obama's proposed regulations to cut greenhouse gas emissions that are being cited by anti-environmentalist critics which he says actually show the opposite of what they claim. Writing in, Cutting Back on Carbon, he says "(e)verything we know suggests that we can achieve large reductions in greenhouse gas emissions at little cost to the economy," says Krugman.
Specifically, the report considers a carbon-reduction program that’s probably considerably more ambitious than we’re actually going to see, and it concludes that between now and 2030 the program would cost $50.2 billion in constant dollars per year. That’s supposed to sound like a big deal. Instead, if you know anything about the U.S. economy, it sounds like Dr. Evil intoning “one million dollars.” These days, it’s just not a lot of money.
Remember, we have a $17 trillion economy right now, and it’s going to grow over time. So what the Chamber of Commerce is actually saying is that we can take dramatic steps on climate — steps that would transform international negotiations, setting the stage for global action — while reducing our incomes by only one-fifth of 1 percent. That’s cheap!
To put this estimated cost into perspective, Krugman notes this equates to a cost of $200 per year for the average American household which has an income of $70,000 a year - less than a small fraction of 1%.
And out of the $600 billion a year we spend on military spending, it is less than 8% to confront global warming, which a group of top generals has already identified as a significant threat to our national security.
Krugman adds that the Chamber of Commerce study almost surely over estimates the cost of the President's proposal, which we will not even hear until Monday, for three reasons.
First their study uses a projection of a growth of emissions of 2.5% per year based on the historic norm, but many reasons suggest this should be lower not the least of which is the retirement of many baby boomers.
Second, the Chamber of Commerce largely ignores the "dramatic technological progress" coming from renewable energy sources such as solar and wind which should dramatically reduced carbon emissions to levels much lower than assumed in their study.
Third, our economy is still depressed so that many of the "supposed costs of compliance with energy regulations" are not really true economic costs at all because they are putting to work labor and capital that would otherwise be sitting idle, thereby giving the U.S. economy a boost - a Keynesian boost.
So why didn't the Chamber of Commerce not take this factors into account, and why are they so fiercely opposing the mitigation of carbon emissions? Kruman answers that they are serving the special interests of the coal industry and lobby groups such as those funded by the Koch brothers.
Krugman also blows up the CoC last argument that what we in the U.S. do, does not matter because the rest of the world will continue to burn coal, by noting that it is in fact the U.S. that has been the major obstacle to holding up major international treaties and other agreements to reduce global coal emissions. Other nations are waiting to see what we do and can be expected to "follow suit."
Now, we haven’t yet seen the details of the new climate action proposal, and a full analysis — both economic and environmental — will have to wait. We can be reasonably sure, however, that the economic costs of the proposal will be small, because that’s what the research — even research paid for by anti-environmentalists, who clearly wanted to find the opposite — tells us. Saving the planet would be remarkably cheap.
I'd like to add a forth, even more glaring flaw in the Chamber of Commerce study - they leave out the cost of doing nothing, as if by doing nothing everything will be normal, such an absurd assumption that we could stop taking it seriously on this count alone. My expectation is that by the time we have full fledged "whole system, full-life cycle, cost" we will discover that even judged just as an economic system we actually come out ahead cutting back carbon emissions at the source before causing all the downstream damage.
We are going to be engaged in this battle of special interest group and anti-science propaganda for quite some time. I'm greatly encouraged by this optimistic first assessment of the battlefield and battle lines by Paul Krugman.
We have are strong case for this supporting this first step we expect President Obama to announce on Monday.
After we complete this significant first major battle, we will have to replay tapes of Winston Churchill's famous speech:
While this is not the end.
This is not the beginning of the end,
But this is the end of the beginning.
But, let's not get ahead of ourselves, and concentrate on winning this first battle first. It is encouraging to hear the initial study being cited by our critics actually support our case more than their own.
3:18 PM PT: Please check out some of my other posts of the last 24 hours.