Are opponents of climate change regulations fiddling while the planet burns? Gauging by some of the responses to President Trump’s executive order to unwind the Obama administration’s climate policies, it certainly would appear that way. But let’s separate hysteria from reality and examine how these policies would chill economic growth, not the earth’s temperature.
When weighing the cost and benefits of President Obama’s climate regulations, it’d be appropriate to drop an anvil on the costs side of the scale and place a feather on the benefits side.
Take for instance, the Clean Power Plan, the linchpin of Obama’s climate legacy. Trump’s EO orders the Environmental Protection Agency to review and, if appropriate, rescind the CPP, which sets state-specific emissions limits based on the greenhouse-gas-emissions each state’s electricity mix. The regulations will drastically shift the energy economy away from coal, which provided approximately a third of America’s electricity in 2015.
The costs of the regulations extend well beyond the coal miner. Restricting the use of a cheap, dependable power supply will raise electricity rates, and those higher prices will reverberate through the economy. Businesses will pass higher costs onto consumers, but if a company must absorb the higher costs, it will invest less. The combination of reduced production and consumption will result in fewer jobs and a weaker economy. Regulations that drive energy prices higher disproportionately eat into the income of our country’s poorest families.
Using a clone of the federal government’s Energy Information Administration model, we project the Obama’s climate agenda will destroy hundreds of thousands of jobs and result in a $2.5 trillion cumulative hit to gross domestic product by 2030.
What about the climate benefits? Even if every state met its carbon targets under the Clean Power Plan, the averted warming would be two hundredths of a degree Celsius by the turn of the century. There’s your feather.
But global warming is a global problem, you say. And it’s going to take global action, which is why Obama worked relentlessly on an international climate agreement. Under the Paris Protocol both the developed and developing world came together in a kumbaya moment to reduce carbon dioxide emissions and address climate change.
Even though there are no repercussions for failing to meet those targets and China has already lied about its CO2 emissions, let’s hold each country to their word. You can add a couple more feathers to the scale. The collective climate benefit for sacrificing trillions in lost economic growth is 0.2 degrees C of averted warming by the year 2100.
No matter what your position on the climate science is, individual and collective mitigation strategies are all economic pain and no meaningful climate gain.
One claim making the rounds is that rescinding the power plant regulations will result in dirty air and water. But the Clean Power Plan is not appropriately named. The regulations are going after a colorless, odorless non-toxic gas in carbon dioxide. Because of technological innovation and also regulation, our nation’s electricity generating units do not spew out the black carbon and smog-forming components you’ll see and breathe in China. We have a rule of law, protection of private property rights, and state and federal regulations to protect public health and environmental well-being. Rescinding these regulations will not result in a race to the bottom where polluters go unchecked.
Another claim is that coal’s demise is a result of economics, as is the rise of wind and solar power. They allege that critics of climate change regulations overstate the economic damage because the costs of renewables are coming down significantly. If that’s the case, then why the hysterics? If renewables are cost-competitive without help from the taxpayer and policies mandating their use, that will promote a diverse, competitive energy sector.
Instead of trying to level the playing field by piling subsidy on top of subsidy, Congress and the administration should remove all preferential treatment for energy sources and technologies. The economically viable sources of energy will flourish and the uncompetitive ones will fail. But this will best serve the energy consumer and protect the taxpayer, rather than serving the needs of special interests clamoring for another handout.
For coal communities, it may very well be an uphill climb to rejuvenate the industry. Some areas of the country are battered and bruised. Natural gas is cheap and abundant. However, the market should determine coal’s fate, not bureaucrats in Washington promulgating regulations that are devoid of any meaningful climate benefit. Rolling back these regulations gives coal a fighting chance.
The change in policy is not just about putting the economy first. It’s about having sensible environmental and regulatory policy that properly assigns costs and benefits. Obama’s climate regulations miserably fail that test.
This piece originally appeared in The Hill on 3/29/17