The New York Times ran an editorial Wednesday encouraging Senators McCain, Clinton, and Obama to vote for the Lieberman-Warner cap-and-trade bill next week.
Pretty much the only numbers in the editorial were contained in the statement noting that the bill calls for a 70-percent reduction in carbon-dioxide emissions by 2050. I bet that might cost us some money. Here’s what the Times had to say about that pesky concern:
Every serious study shows that . . . a well-designed, market-based program could yield positive economic gains — greater energy efficiency, technological innovation and reduced reliance on foreign oil. The same studies also make clear that the costs of inaction will dwarf the costs of acting now. The bill’s proponents must make sure that the economics of this debate are framed in a positive way.
Ah. Glad that “studies” make that clear.
Well, here are a few numbers.
The Science Applications International Corporation (SAIC) estimates that this proposed law would result in a 1 percent reduction in GDP within five years. That means one million American jobs lost by 2014, with employment and family purchasing power dropping off sharply thereafter. In short, Lieberman-Warner would cost a lot.
And what exactly would we gain from this self-imposed economic pain? Here’s how a recent NRO editorial described the estimated costs of inaction:
The U.N. IPCC estimates that unconstrained global warming is expected to cause damages equal to about 1 to 5 percent of global economic output about a century from now. William Nordhaus of Yale has estimated that the net benefit that would be created for the world by a perfectly implemented, globally harmonized carbon tax (which most economists agree would be more efficient than a cap-and-trade system) would be just under 0.2 percent of the present value of future global consumption. That presents a painfully thin margin for error, ignores the fact that costs will be disproportionately borne by the U.S., and does not bear much resemblance to the rhetoric of [climate] crisis. . . .
And it is highly unlikely that we could ever realize this theoretical benefit. Nobody has any realistic plan to get China and India to reduce emissions, and without doing so the costs of cap-and-trade to the U.S. would be dramatically greater than the benefits. Even if we could get the developing world to go along, the theoretical benefits that such a regulatory regime might create would, in the real world, be more than offset by the economic drag that would be created by the side deals required to get China, India, and the U.S. ethanol lobby, among many others, to go along with it.
Thanks, but no thanks.