Monday, March 17, 2008

Economics of Climate Change Legislation

Gristmill pointed out a new document released by the EPA last Friday afternoon. The document analyzes the potential economic impact of the Lieberman-Warner Climate Security Act (S.2191). The EPA found that the GDP would grow by 81% by 2030 without the legislation; with the legislation, the GDP would grow 80%. The findings vindicate arguments that reductions in greenhouse gases would not harm economy. Even emission reductions forced changes in some sectors, any losses would be offset by growth elsewhere.

The Lieberman-Warner bill would reduce greenhouse gas emissions 40% by 2030 and 56% by 2050 via a cap-and-trade system. Most climate change analysis indicates that deeper emissions cuts are needed, something more along the lines of 80% by 2050. For that reason the bill has split environmental activists. The National Wildlife Foundation supports the bill; Friends of the Earth and the Sierra Club have withheld support without significant changes.