Global Warming May
Take Economic Toll
August 12, 2005 — By Sarah Edmonds, Reuters
WASHINGTON — The White House's
refusal to consider government caps on greenhouse gas emissions may save
the U.S. economy short-term pain, but experts warn unchecked global heat
could exact a heavy long-run toll.
"While there are costs associated with reducing emissions, there are
certainly costs associated with not doing anything," said Kevin Forbes,
head of Catholic University's economics department. "It would be, in my
opinion, folly not to try to do something."
According to Ralph Cicerone, president of the National Academy of
Sciences, earth surface temperatures could be up to 10.4 degrees
Fahrenheit above 1990 levels by 2100, potentially worsening storms,
raising sea levels and eating away ice caps.
After shunning the Kyoto Protocol on greenhouse gases, which President
Bush said would have "wrecked" the economy, the United States last month
joined Japan, Australia, China, India and South Korea in a pact focused
on technology-sharing, without set targets.
The world's richest economy is also its biggest carbon dioxide emitter,
pushing out 5.8 billion metric tons in 2003. China, in second place,
emitted 3.5 billion, with all of Western Europe at 3.9 billion.
U.S. emissions are projected to keep rising, despite plans to lower
carbon intensity, or use per unit of economic growth.
The White House wants cuts to be voluntary and resists measures that
would impose restrictions on output of such gases as carbon dioxide and
nitrous oxide, seen as culprits behind global warming, saying this would
hurt economic growth.
"We oppose policies like mandatory caps on emissions, that would achieve
reductions by raising energy costs, slowing the economy, and putting
Americans out of work," said White House spokeswoman Dana Perino.
While experts agree new technologies are vital, many see the economic
argument as spurious. Higher costs may also be a necessary evil since
they spur innovation and companies will act more aggressively if
inaction hits where it counts.
John Reilly of the Massachusetts Institute of Technology's Joint Program
on the Science and Policy of Global Change has examined the economic
effects of several proposals.
"When we looked at implementing Kyoto ... we estimated that would be
6/10ths or 1 percent of the economy. We thought that was costly but
that's not wrecking the economy," he said.
Still, even those who back government restrictions agree Kyoto isn't the
answer for the United States.
They call its targets too tough, its deadline too near and say the
absence of developing countries such as India and China could distort
the global economic playing field.
What is needed, they say, is a world-spanning deal with fair goals. "You
will never be able to solve this problem without all of the major
emitters being involved," said Katie Mandes of the Pew Center on Global
Climate Change.
Experts say economic risks could be eased with a Kyoto-like allowance
trading system so the regions best able to make affordable cuts can sell
their achievement to those less able.
While the United States can't fix the problem alone, Reilly said it
should lead the way with meaningful steps.
"I think it's one of the great tragedies of our era that the
administration hasn't risen to the occasion on this. It's committing
future generations to extraordinary costs and problems," said James
Gustave Speth, dean of the Yale School of Forestry & Environmental
Studies. "In the same breath, I have to say I wish the prior
administration had done more itself."
The great unknown is the price of inaction.
"There are real economic costs associated with not taking action,
including changes to water supply infrastructure, industrial capital,
like pipelines, and with human health," said Janet Peace, senior
research fellow, economics at Pew.
"With droughts, there's a cost. With increased flooding, there's a cost
(and) with increased hurricanes and tornadoes."
Cap critics say real change would take many Kyotos.
"Scientists who support Kyoto have estimated that emissions cuts
equivalent to 30 Kyotos will be needed," said Myron Ebell, director of
global warming at the Washington-based Competitive Enterprise Institute,
which supports "free enterprise and limited government."
He said costs would rise with each new target since companies make the
cheapest cuts first. "I can't imagine that any informed person could
claim that the total costs will be anything less than astronomical."
Reilly admitted the ultimate price will be high although solutions can
and should include economic safety valves.
"Starting on a path isn't committing to the entire path," he said. "If
the cost becomes too great for the economy, we have to reconsider where
we go. If the climate effects become more severe, or less severe, then
we reconsider as we go."
And a fix may cost less than feared.
"When you turn the genius of the private sector loose on solving the
problem, they do things," said Speth.
Chemical giant DuPont has cut emissions by 72 percent, beating both its
65 percent target and its self-imposed 2010 deadline at a cost of $55
million.
Tom Jacobs, DuPont's senior adviser on global affairs, said the company
sees caps as inevitable and exploited "unique opportunities" for big,
low-cost reductions, though he admits cheap options are not limitless.
Source: Reuters |