Experts Debate Climate Change Policy Impacts
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Representatives from environmental and business groups wrangled over the potential economic impact of controversial climate change legislation currently being considered by Congress during a panel discussion at the Chamber last Friday. The discussion, which included a keynote address by James L. Connaughton, Chairman of the President’s Council on Environmental Quality, took place as part of a joint meeting of the Chamber’s Environment and Energy Committee and Regulatory Affairs Committee.
Economists and authors from the Environmental Defense Fund (EDF) and the American Council for Capital Formation (ACCF) debated the overall increase in per household energy costs should the Lieberman-Warner climate change bill that Congress is expected to take up this summer become law.
A study by EDF shows that the effects of the legislation on the average household energy bill "would be modest and in line with historical variations in energy costs," according to Dr. Nathanial Keohane, director of economic policy and analysis for EDF. "There will be a cost, but only about 3% to 5%, or at most 10% more than what we have now," and not the 45% that many others are predicting. Keohane went on to say that the impact of climate change policy "will be negligible relative to the robust economic growth of the U.S. economy."
But ACCF Executive Vice President Dr. Margo Thorning said that EDF underestimated cost increases by making "highly unrealistic assumptions." Among those assumptions is the expectation that the United States will build 150 nuclear plants by 2030.
Thorning said that Lieberman-Warner legislation would lead to a loss of anywhere from 1% to 2.7% of GDP when fully implemented. Taking it a step further, Thorning suggested that, at best, the bill would result in 800,000 jobs being lost and household incomes dropping by $1,010 by 2030. In the worst case scenario, 4.05 million jobs would be lost and household incomes would drop by $6,752 on average. If enacted, the measure would require a "draconian change in lifestyles," Thorning concluded.
This post originally appeared in uschambermagazine.com.