Opponents of Waxman-Markey, when not denying that global warming is real, are resorting to another time-honoured tactic of scaring people with wildly inflated cost estimates. Fortified with alarming numbers from thinktanks, opponents are calling the bill a “tax-and-trade” scheme that would saddle families with an unbearable financial burden for decades.
One source of these spurious numbers, the Heritage Foundation, claims that Waxman-Markey would reduce GDP by a total of $7.4tn and destroy 1.9 million jobs by the year 2035. A family’s electricity bill would climb 90% and natural gas prices would climb 55%, adding $1,500 to the family budget. An even scarier assertion that the bill would cost families $3,100 was purportedly based on an MIT study – a claim that one of the study’s authors, John Reilly, roundly disputed.
Opponents reached these conclusions by exaggerating the downside and ignoring the upside altogether. They have overstated the costs of renewable energy, underestimated the future costs of fossil fuels and left out the cost savings of improving energy efficiency. The Heritage Foundation report projects home energy prices will increase three to four times faster than the Congressional Budget Office or Environmental Protection Agency studies, and doesn’t include any benefits from improvements in energy efficiency or investing in new industries.
The CBO came in with a cost of $175 per household. The EPA projects a lower net cost per household of $80 to $111 per year, and predicts energy savings for US households would lower utility bills by roughly 7% by 2020. Critics often cite the burden on the poor as a reason to not support renewable energy. But the CBO analysis projects a net benefit to the lowest income quintile of $40 per year.
These savings will come by investing in renewable energy technologies that won’t be subject to the relentless and inexorable increase in fossil fuel prices. The EPA projects that by 2025 two thirds of new energy generation will be from renewable sources.
We heard similar scare tactics here in Delaware during a recent debate over offshore wind power, when opponents tossed out wildly inflated cost projections, some as much as 10 times higher than official estimates. But citizens and elected leaders considered the benefits, not just the exaggerated cost projections, and Delaware became the first state to sign off on an agreement to build offshore wind power.
There is one important factor the Heritage, CBO and EPA analyses all leave out: the cost of unchecked global warming, which could be considerable. Global warming will do more than inconvenience a few polar bears. Reduced snow melts in the Rockies and the Himalayas could disrupt agricultural water supplies in the US, China and India.
As more water is released from ice caps and mountain ranges, rising sea levels could force the relocation of significant populations and disrupt important infrastructure. Here in Delaware, rising sea levels could flood the principal highway and rail line connecting New York and Washington. Water and sewer service for more than half of Delaware’s residents could be rendered unsafe or shut down altogether.
A bill this complex on a subject this important deserves careful review. But opponents of Waxman-Markey have resorted to distorted analysis, one-sided arguments and crass exaggerations to make the case that we can’t afford to act. More careful – and balanced – analysis leads to the opposite conclusion that can’t afford to wait.