Written by Joseph Bast and James M. Taylor
The burning of fossil fuels to generate energy produces carbon dioxide (CO2), a greenhouse gas which, everything else being equal, could lead to some warming of the global climate. Most scientists believe the Earth experienced a small rise in temperatures during the second half of the twentieth century, but they are unsure how large a role human activities may have played.
The important questions from a public policy perspective are: How much of the warming is natural? How sure are we that it will continue? Would continued warming be beneficial or harmful?
The answers, in brief, are: Probably two-thirds of the warming in the 1990s was due to natural causes; the warming trend already has stopped and forecasts of future warming are unreliable; and the benefits of a moderate warming are likely to outweigh the costs.
Global warming, in other words, is not a crisis.
Reducing Emissions is Expensive
While the likelihood that global warming would be a crisis was never large and is getting even smaller as new research is reported, we know the cost of reducing man-made greenhouse gas emissions would be high.
An analysis of a carbon “cap-and-trade” proposal considered by the U.S. Senate in 2008 – the Lieberman-Warner Act – found it would destroy between 1.2 and 1.8 million jobs in 2020 and between 3 and 4 million jobs in 2030; impose a financial cost on U.S. households of $739 to $2,927 per year by 2020, rising to $4,022 to $6,752 by 2030; and would increase the price of gasoline between 60 percent and 144 percent by 2030 and the price of electricity by 77 percent to 129 percent (National Association of Manufacturers/ACCF, 2008).
States that try to reduce emissions on their own are likely to incur costs 10 times greater than a national program because businesses and residents would find it easier to move to nearby states with lower energy costs or less-burdensome regulations and because states would have to rely on more costly command-and control regulatory approaches (Bast, Taylor, and Lehr, 2003).
The record of existing emissions trading programs gives little basis for supposing a massively bigger regime would work. The sulfur dioxide trading program, often pointed to as a model, succeeded only because railroad deregulation made low-cost, low-sulfur coal available from the Powder River Basin (Johnston, 1998).
European emissions trading programs have been characterized by low trading volumes, high price volatility, and mostly paper transactions that do not result in actual reductions in emissions. Most European countries are far behind schedule in meeting their emission reduction goals under the Kyoto Protocol.
So what should be done about global warming? Actually, a lot is being done: The federal government of the U.S. is spending billions of dollars every year on research. State and federal governments are massively subsidizing ethanol producers and wind and solar power generators in the name of “reducing carbon emissions.” Billions of dollars more are being spent by businesses and consumers complying with regulations that are said to be justified by concern over global warming.
In light of the compelling scientific evidence that global warming is not a crisis, policymakers should consider reducing current spending on climate change and repealing regulations and mandates that were previously justified by fear of global warming. More specifically, they should consider the following policies:
- Oppose higher energy taxes or carbon “”cap-and-trade”“ programs.
- Repeal renewable energy mandates that require utilities and their customers to buy high-priced electricity from solar and wind companies.
- Support research independent from government research programs that are biased toward alarmism.
- Remove barriers to energy conservation embedded in state and local laws and regulations, such as restrictive building codes and zoning ordinances.
- Support research and, if appropriate, capital investments in adapting to climate change rather than trying to prevent it.
- Pursue win-win strategies that produce enough benefits to pay their way apart from their possible effect on climate
- Oppose planned increases in Corporate Average Fuel Economy (CAFE) standards that would reduce car and truck emissions by small amounts while dramatically increasing prices and reducing consumer choices and safety.