Today we were joined by The Heritage Foundation's David Kreutzer who recently joined William W. Beach and Ben Lieberman in putting together a very detailed analysis the Lieberman-Warner global warming bill and the economic impact it would have on America entitled The Economic Costs of the Lieberman-Warner Climate Change Legislation Here's an overview -- be sure to see the original for excellent charts and graphs.
Overview
S. 2191 imposes strict upper limits on the emission of six greenhouse gases (GHGs) with the primary emphasis on carbon dioxide (CO2). The mechanism for capping these emissions requires emitters to acquire federally created permits (allowances) for each ton emitted. The cost of the allowances will be significant and will lead to large increases in the cost of energy. Because the allowances have an economic effect much like the effect of an energy tax, the increase in energy costs creates correspondingly large transfers of income from private energy consumers to special interests.
Implementing S. 2191 will be very costly, even given the most generous assumptions. To put a firm floor under the cost estimates, we assume that all of the problems of meeting currently enacted federal, state, and local legislation are overcome. A further unlikely condition is added; namely, that a critical but unproven technology--carbon capture and sequestration--will be ready for full-scale commercial use in just 10 years.[1] Making a more reasonable assumption about just this one technology leads to dramatically higher (but by no means worst-case) costs.[2] We use these two cases to bracket our cost projections of S. 2191:
* Cumulative gross domestic product (GDP) losses are at least $1.7 trillion and could reach $4.8 trillion by 2030 (in inflation-adjusted 2006 dollars). * Single-year GDP losses hit at least $155 billion and realistically could exceed $500 billion (in inflation-adjusted 2006 dollars). * Annual job losses exceed 500,000 before 2030 and could approach 1,000,000. * The annual cost of emission permits to energy users will be at least $100 billion by 2020 and could exceed $300 billion by 2030 (in inflation-adjusted 2006 dollars).[3] * The average household will pay $467 more each year for its natural gas and electricity (in inflation-adjusted 2006 dollars). That means that the average household will spend an additional $8,870 to purchase household energy over the period 2012 through 2030.
Our next guest was Rep. Kevin Brady of Texas who discussed FIT Force: Taking Government Spending from Fat to Fit
The Fiscal Integrity Task Force, or "FIT Force," is a special GOP task force to identify and fight for spending reforms to "get government off Americans' backs and out of their wallets." An initiative of Leader John Boehner, the goal of FIT Force is to take government spending from fat to fit.
Co-Chairman Rep. Thaddeus McCotter (MI), Chairman of the House Republican Policy Committee, and Rep. Kevin Brady (TX) and, in conjunction with various Members of Congress, we will report back their findings to the Leader in the next coming weeks.
And last but not least, Iain Murray discussed his new book The Really Inconvenient Truths: Seven Environmental Catastrophes Liberals Don't Want You to Know About--Because They Helped Cause Them
Iain has a very good grasp on this issue and as Jonah Goldberg said: "He has the keenest of eyes for spotting where science ends and utopianism takes its place"
I'm looking into securing a blog interview with Mr. Murray and hope to have it for you ASAP
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