Step aside, elected Members of Congress. If you can’t pass cap and trade legislation, The Environmental Protection Agency will move in with massively complex and costly regulations that would micromanage just about every aspect of the economy. They announced today that carbon dioxide and five other greenhouse gases (GHGs) threaten public health and the environment.
Since 85 percent of the U.S. economy runs on fossil fuels that emit carbon dioxide, imposing a cost on CO2 is equivalent to placing an economy-wide tax on energy use. The kind of industrial-strength EPA red tape that the agency could enforce in the name of global warming would result in millions of dollars in compliance costs. These are unnecessary costs that businesses will inevitably pass on to the American consumer, slow economic growth and kill jobs. Although the crafted rules say only facilities that emit 25,000 tons of carbon dioxide per year or more will be affected, businesses fear the exemption may not hold up in court and could now be imposed on many smaller commercial buildings, farms, restaurants, churches and small businesses.
Even EPA administrator Lisa Jackson acknowledged top-down regulations would be more costly than a cap and trade system, saying, “Legislation is so important because it will combine the most efficient, most economy-wide, least costly, least disruptive way to deal with carbon dioxide pollution,” she recently stated, adding that “we get further faster without top-down regulation.” Of course, this isn’t a legitimate argument to pass cap and trade legislation. Cap and trade, a climate treaty and EPA regulations are the three ugly step-sisters of climate policy. Yet they’re trudging forward anyway.
The Heritage Foundation’s Center for Data Analysis study of the economic effects of carbon dioxide regulations found cumulative gross domestic product (GDP) losses of $7 trillion by 2029 single-year GDP losses exceeding $600 billion in some years, energy cost increases of 30 percent or more, and annual job losses exceeding 800,000 for several years. Hit particularly hard is manufacturing, which will see job losses in some industries that exceed 50 percent.
And George Will writes that any emissions reduction targets, whether they come from the EPA, cap and trade, or a Copenhagen treaty are simply unattainable: “Barack Obama, understanding the histrionics required in climate-change debates, promises that U.S. emissions in 2050 will be 83 percent below 2005 levels. If so, 2050 emissions will equal those in 1910, when there were 92 million Americans. But there will be 420 million Americans in 2050, so Obama’s promise means that per capita emissions then will be about what they were in 1875. That. Will. Not. Happen.”
In the press release today, the EPA stated, “Science overwhelmingly shows greenhouse gas concentrations at unprecedented levels due to human activity,” and that “GHGs are the primary driver of climate change.” When the Environmental Protection Agency (EPA) issued the initial endangerment finding in April, administrator Jackson noted that the agency “relied heavily upon the major findings and conclusions from recent assessments of the U.S. Climate Change Science Program and the Intergovernmental Panel on Climate Change [IPPC].” Not only does Climategate seriously call this into question but so do the 700 dissenting scientists refuting claims made by the IPCC report. That 700 figure is more than 13 times the number of scientists (52) who had a direct role in the IPCC report.
Regardless of one’s view of carbon dioxide and global warming, environmental improvement and economic growth do not have to be mutually exclusive; in fact, most of the time environmental improvements come as a result of economic development. Companies will innovate and invest their resources to become more energy efficient because it will save them money in both the short and the long run.
In his New York Times column over the weekend, Jared Diamond points to Wal-Mart as an example: “Obviously, a business can save money by finding ways to spend less while maintaining sales. This is what Wal-Mart did with fuel costs, which the company reduced by $26 million per year simply by changing the way it managed its enormous truck fleet. Instead of running a truck’s engine all night to heat or cool the cab during mandatory 10-hour rest stops, the company installed small auxiliary power units to do the job. In addition to lowering fuel costs, the move eliminated the carbon dioxide emissions equivalent to taking 18,300 passenger vehicles off the road.”
Increased regulations and red tape will stifle that innovation by reducing the amount of resources that can be invested efficiently. They will have disruptive impacts on the economy and on living standards that will ripple throughout the country to reduce the earth’s temperature a few tenths of a degree.
For more, see The Heritage Foundation’s full analysis on the how EPA regulations would hijack the economy.