Commen sense…now there is something that seems novel in this debate!!!!!
Matt
by Keith Johnson
WSJ Environmental Capital
9.8.09
So much of the wailing and gnashing of teeth around the climate bill in Congress revolves around the costs of curbing greenhouse-gas emissions. What about the benefits?
That is, seemingly everybody—the Environmental Protection Agency, the Congressional Budget Office, the Energy Information Administration, not to mention private-sector lobbies—has tried to tally how much it will cost to nudge America toward cleaner energy and fewer greenhouse-gas emissions. None have sought to figure out what kind of benefits the bill could bring.
That got some folks thinking. “Climate change is arguably one of the most complex issues to face Congress in recent memory, and yet Congress is essentially conducting its deliberations after having reviewed barely half the data,” says a new brief out from NYU Law School’s Institute for Policy Integrity, an outfit basically created to bring cost-benefit analysis back to the environmental arena.
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 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.”
Of course, the Senate still faces attacks from the right and the left when it comes to the climate bill. Will a move to tally not just the costs but the potential benefits of the bill make the Senate’s job any easier?
