Something fun that the League of Conservation Voters included in their release about the Blunt ad is a state-by-state analysis of the effect cap and trade would have on the US economy. Even more fun is that they ran the numbers through the National Association of Manufacturers’ high-cost estimate that conservatives tout as showing the ruinous effects of cap and trade on our economy. Even in this high cost scenario, Missouri would still have a huge increase in GDP and average income over the next 23 years:
It’s also worth noting that the industry-friendly study has a host of methodological problems that downplay the possibility of economic growth returned to the economy by cap and trade. For example, one of the reasons cap and trade is estimated to cost so much by the NAM study is that they foresee very little shift to clean and renewable sources of energy, forecasting only a total of 5 gigawatts of wind generating capacity by 2030. The problem with that estimate is that we had a 5.2 GW capacity already last year!
Naturally, if we put a cap and trade system in place and ratchet the cap down as planned, the fossil fuel systems we already have in place would cost a lot more in 20 years. And if we are still stuck with the same carbon emitting utilities we have now, and no shift has been made, then it will cost more for no real reason. But the whole point of cap and trade is to shift ourselves to cleaner energy production and wiser consumption!
Right now, the costs of burning fossil fuels are implicit in such disparate problems as rising ocean levels, more extreme weather emergencies, and asthma caused by coal emissions. But we don’t link those costs explicitly to how we generate and consume energy. I don’t think when I set my thermostat a couple of degrees higher that the increased electricity consumption will burn more coal that will release more carbon into the atmosphere which will keep us on a path of warming that will eventually melt more polar ice and raise the sea levels, flooding my hometown of Lake Charles, LA, 50 miles from the Gulf of Mexico. (Which it will at this rate.)
A cap and trade system provides that explicit link (it costs producers and users money) and generates both incentives and revenues toward building a new system where we don’t have those same costs, either explicit or implicit. Cap-and-trade proposals call for giving some of the revenue to consumers, so if I have to pay a little extra on the electric bill every summer, I’ll start looking for ways to save on energy costs. When I get my cap-and-trade rebate, I can put it into insulation, caulking, more energy-efficient lightbulbs, and so on, lowering my bills and my carbon footprint. Energy producers will have to pay extra to burn coal or oil, so they will start looking for ways to reduce their costs, whether it’s from greater efficiency, investing in solar and wind and other forms of clean and renewable energy, or sequestering the carbon emissions.
Naturally, this shift will require investment right here in our communities, and that investment means jobs – jobs like weatherizing homes, installing solar panels on roofs, and building wind turbines. That effect isn’t measured in the NAM study, either. Instead, cap-and-trade is seen by them as a static drain on the economy. But to come full circle, as the LCV points out by the NAM study’s own assumptions, it’s not such a drain after all.