“Waxman-Markey: Benefits Far Outweigh Costs, New Study Finds.” So trumpets the Wall Street Journal’s Environmental Capital blog. That prompts a serious double-take by anyone remotely familiar with the issue of cap-and-trade — which, according to our president, is designed to make your “electricity costs . . . necessarily skyrocket” and to bankrupt coal and (if you listen to him carefully — and in full context) all sorts of other industries, too, at the ratepayers’ expense. But if you assume the displaced workers will soon be installing windmills and that the money for your schemes falls from the sky, well, soon, we’ll be rich, rich rich!

The blogger doesn’t, therefore, appear remotely familiar with the issue, as he takes at face value these claims from the NYU Law School’s Institute for Policy Integrity — by chance an institution that had previously made up its mind on the issue, having petitioned EPA to regulate greenhouse gases more and faster (I can’t say “reporter” here because — in what appears to be somewhat of a pattern when it comes to pro-rationers’ claims — the author offers no insight beyond a recitation of the paper’s claims.). Suffice it to say, in backfilling support for their stated position, the folks at NYU Law don’t make very good witnesses — despite the post touting IPI as “an outfit basically created to bring cost-benefit analysis back to the environmental arena.” The evidence suggests instead that it is an institute dedicated to cramming down the global-warming agenda by using existing laws and adding new ones.

Also, the analysis could use some work and is, I am afraid, quite clearly mere advocacy. The WSJ’s cheerleading reads in pertinent part:

The upshot? As flawed as it may be, the Waxman-Markey climate bill makes economic sense, offering benefits worth at least twice as much as it costs, if not more.
“From almost any perspective and under almost any assumption, H.R. 2454 is a good investment for the United States to make in our own economic future and in the future of the planet,” the paper concludes. But what’s the math look like?
The authors set out to see how much a ton of carbon is worth — not what it trades for on carbon exchanges, but how much a ton of carbon not emitted to the atmosphere is worth society in terms of avoiding climate change.
Turns out, even though the U.S. government does not have a hard and fast figure, it has a rough idea — around $19 a ton. (There is a huge array of estimates for the “social cost of carbon”; those so inclined will have fun on pages 21-30 here.)
So, given that the Waxman-Markey bill would [sic] curb emissions over the next 40 years, it’s a pretty simple job to tally up the potential benefits: about $1.5 trillion on the middle-of-the-road estimate. The benefits could be as low as $382 billion or as high as $5.2 trillion, depending on how you fiddle with the numbers.
Since Waxman-Markey is meant to cost about $660 billion, that means the bill provides $2.27 in benefits for every dollar spent, the brief concludes. That doesn’t include extra benefits-cleaner air from a cleaned-up power sector, for instance. And it suggests that even tougher greenhouse-gas targets in the Senate version of the bill would make an even more compelling economic argument.
Now, there are some important caveats. That “cost of carbon” is a global cost; the U.S. doesn’t face quite the same risk from climate change as, say, Bangladesh. Which means all the “benefits” cited in the paper are similarly global, even if the costs are not: “A large portion of benefits might not be felt directly or immediately within U.S. borders,” the paper notes, suggesting that U.S. voters think of it as a “highly effective, highly leveraged form of foreign aid.”

In response, consider the following:

That cost represents a foreign aid transfer of $400 billion (though it might be a net present value figure).

In its low-benefits scenario (which is the most likely scenario, due to e.g., “leakage,” and that for more than a decade Waxman-Markey actually does not require emission cuts, despite the assumption here that it will produce them), the costs far outweigh the benefits, even before accounting for the apples and oranges problem.

The “social cost” of carbon estimates all depend on climate sensitivity assumptions proven wrong by observations and taken apart in a new paper by Lindzen and Choi.

The paper appears to assume that every ton of CO2 reduced by Waxman-Markey is a ton reduced globally — as if capital, jobs, and emissions could not migrate from the United States to other parts of the world. Europe’s experience with emissions trading has shown that’s not how the real world works: Witness EU steel jobs now in Kentucky, Alabama, and — on tap, but apparently now on hold — Louisiana. Not to mention China, Brazil, India, Malaysia (where the Kentucky jobs are likely to head if we pass Waxman-Markey, I’m told).

They do claim/admit that the alleged benefits are global. Doing the math from their figures:

Highest possible benefit = 5.2 trillion / 6 billion people = benefits of $866 per person

Cost to U.S. citizen = 660 billion / 300 million people = cost of $2,200 per citizen

And that’s presumably a net present value figure, as well, a la the President’s postage-stamp sleight of hand.

Would anyone accept a raise in the foreign aid budget of $1,300 per person? Thought not.

And of course, if we believe the alarmists, the developing world will benefit more than America from such programs, meaning the disparity is that much greater.