“Global” and “warming” are perhaps the two most important words used to justify the approaching governmental control of our economy. In reality, global warming is barely occurring: In the 30 years starting in 1977, warming amounted to 0.32 degree Fahrenheit per decade, and in the next hundred years it is estimated to be about half a degree per decade.
So global warming looks like neither the alarmists’ serious threat, nor an immediate crisis that requires governmental control of America’s economy to reduce it. Nevertheless the government solution to these increases–the Waxman-Markey bill, which passed the House earlier this year–is estimated to lower global temperatures only about 0.18 degree Fahrenheit in the next 90 years.
And now comes the new Boxer-Kerry Senate bill, which would require a 20% reduction in greenhouse-gas emissions by 2020.
As a practical matter, what would such a reduction mean to us and our economy? Steven Hayward of the American Enterprise Institute calculates that a 20% reduction would mean cutting America’s greenhouse gas emissions to our 1977 levels, and that would radically change both the U.S. economy and our personal lives.
As Mr. Hayward notes, we had 220 million people in America then; today we have 305 million. In 1977 our economy was produced $7.2 trillion (in 2008 dollars); today it is twice as large, at $14.2 trillion. Back then we had 145 million vehicles on the road; today we have 251 million. America has substantially grown, and our energy needs have grown as well.
So what would we have to do get back to 1977 emission levels and meet the Boxer-Kerry requirement? First, car and truck miles travelled would have to be reduced by one-third (or fuel efficiency improved by one-third, hard to do in 10 years), which would seriously reduce travel and transportation, and likely force changes in automobile design that consumers would not like.
Next, the amount of coal burned to generate electricity would have to be cut in half. So we would close more than 200 of our coal-fired power plants, and as Mr. Hayward says that would reduce our electricity supply by some 800 million megawatts. To replace those millions of megawatts with non-hydro renewable power sources like wind, solar and geothermal power would be virtually impossible. We have about 130,000 megawatts generated by them now, and the growth rate of these power sources over the last five years suggests it would take 97 years to make up for the shutdown of 200 coal-fired plants.
Nevertheless, the Boxer-Kerry bill, at least in its draft form, is an improvement over Waxman-Markey. It is in favor of nuclear power–which, in Sen. John Kerry’s words, “needs to be a core component of electricity generation if we are to meet our emission reduction targets”–though it does not mention the construction of the 70 to 100 nuclear plants we would need to add to the 104 we now have in order to reduce carbon dioxide emissions. It is also in favor of expanding offshore drilling and natural-gas exploration and production, something that Waxman-Markey does not support.
On the other hand, Boxer-Kerry would be as bad for our economy as Waxman-Markey in two respects. First, it too contains the protectionism of the Waxman “border adjustment program” to begin a new American policy of putting tariffs on goods imported from counties that do not adopt acceptable environmental standards, which surely would result in retaliation tariffs on our exported goods.
And the bill aims to achieve targeted emission declines through a similar cap-and-trade program involving carbon permits. This is said to cover only 2% of U.S. businesses, but it would drive up the cost of electricity, food and other goods for all households and businesses, and its 20% emission reduction is even larger than the 17% in that bill (our current recession has already reduced emissions by 6%, which Sens. Kerry and Barbara Boxer apparently think is real progress). The bill would reduce the portion of emissions covered by the caps, eliminating regulation of methane emissions from coal mines, landfills, and oil and gas pipeline distribution.
Both bills include offsets which would allow emitters (and the politicians in Washington) to claim we are hitting our reduction targets while actually emitting more carbon by “investing” in projects in the U.S. and other countries that ostensibly reduce carbon (whether or not they actually do)–a process that is fraught with potentials for fraud and abuse.
And both bills suffer from the flawed logic of thinking a cap-and-trade system would actually work, when we know it has not worked in Europe, and that the only way a cap-and-trade system could meet its emission targets in the U.S. is by shrinking our economy.
Congressional Budget Office director Douglas W. Elmendorf testified last week before the Senate Energy and Natural Resources Committee that the cap-and-trade provisions of the House bill would reduce the U.S. gross domestic product by 0.25% to 0.75% in 2020 ($60 billion to $180 billion), and by 1.0% to 3.5% in 2050.
Like Waxman-Markey, Boxer-Kerry would expand the control the government has over the American economy, businesses, and individuals. It would have little impact on reducing global warming but would significantly depress our economy. One wonders if the purpose of the Boxer-Kerry bill is really just to give the U.S. something to take to Copenhagen for the United Nation’s Climate Change Conference in December.
High-cost policies with low-impact results are not in America’s best interests, so we should postpone both bills and think through more clearly our desired energy policies.
