As we reported this morning, EPA administrator Lisa Jackson was forced to admit she had not even read the Waxman-Markey carbon taxing bill before her agency released a report claiming the economic impact of cap and trade legislation would be “modest.” Asked how the EPA could produce a report on a bill they hadn’t even read yet, Jacson said: “We had to make assumptions.”
What were some of those assumptions? For starters, as University of Colorado professor Roger Pielke notes, the Obama EPA used GDP growth estimates far below those used by the Obama Office of Management and Budget. To make his unprecedented deficit spending look as innocuous as possible, Obama’s OMB used a 3.3% projected GDP growth rate. But Obama’s EPA used a 2.5% GDP growth rate. That may .8 difference may seem small, but applied to the entire economy the smaller EPA estimate means a $1.22 trillion smaller U.S. economy.
So why did Obama’s EPA use smaller GDP growth estimates? Peilke explains:
A lower GDP means fewer emissions. It also means that needed efficiency gains are smaller to meet the same targets. For instance the EPA analysis assumes that the US will see energy intensity improve at a rate faster than the 2.5% per year GDP growth. To maintain the same energy demand figures this rate would have to increase to above 3.3% per year. … The point is that in addition to the “lost” GDP growth, there would be considerable extra costs for emissions reduction (determining how much would require re-running the EPA analysis, but it is safe to say that it would be a lot).
So in order to get the emissions reduction numbers to work out, Jackson had to shrink the U.S. economy by $1.22 trillion. Pielke writes: “How much is $1.22 trillion? About $11,000 per U.S. household.” In other words, Obama administration EPA administrator Lisa Jackson stole $11,000 from every American household just so the Obama administration could lower world temperatures by 0.14°F.