Cost of climate bill will be slight, CBO reports

(Photo of California wildfire from Flickr and photographer slworking2)

The cost of the House-passed climate bill would be mild, the Congressional Budget Office said Friday. The American Climate and Energy and Security Act (ACES) would reduce GDP by ¼ to ¾ of a percent by 2020 and 1 to 3.5% by 2050, the CBO said in a new report.

The impact on household purchasing power would be less than 1% in 2020 and 1.2% in 2050.

CBO said it did not consider the benefits of averting climate change.

And therein lies one problem with predicting the costs connected with any climate bill or plan. The costs of doing nothing are even higher. In some countries GDP could be cut by as much as 20% by 2030, according the UN-backed Economics of Climate Adaptation Working Group, which sees Florida losing as much as 10% of GDP.

The other problem in making predictions is that most groups figuring the costs have an ax to grind – they’re either for or against greenhouse gas restrictions and that colors the way they make their estimate.

Hard to figure
The Congressional Research Service (part of the Library of Congress), in a second report released Friday, said any estimate should be “viewed with attentive skepticism.” They examined predictions from such diverse sources as the EPA, MIT, National Black Chamber of Commerce, Heritage Foundation, and National Association of Manufacturers. (The last three oppose the climate bill.)

An EPA study earlier this year said household costs would go up $54 a year, for example, while the Energy Information Administration said $83. An older CBO estimate was $175. The estimates are all over the map.

Efficiency a key
Energy-efficiency programs are important to reducing costs, several organizations have pointed out, so a lot depends on how much efficiency is part of the package. Energy savings could outweigh energy price increases.

The American Council for an Energy-Efficient Society and Center for American Progress estimated household savings could be $215 years with proper energy efficiency.

Cost of doing nothing
But the cost of climate change that continues unabated will be billions more than the cost of curbing it, a new Union of Concerned Scientists study says. Hurricane damage in Florida could be $33 billion by 2030, the report says.

It’s easy to point to the cost of doing something. But that’s not the whole story.

I used to have a poster in the '60s that said, “Not to decide is to decide.” Those who oppose climate legislation or cap-and-trade as too expensive – or want to put it off – are turning a blind eye to what happens if they fail to act.

We need to consider the costs of flooding, hurricanes, heatwaves, droughts, wildfires, rising seas and all the other weather calamities that will hurt agriculture, businesses and real estate. Remember New Orleans? And there’s also the cost of adaptation – the rush to throw up sea barriers and the like when the results of global warming become more evident. Experts are already recommending expensive adaptation measures like dams, barriers and improved drainage.

(Sources: Congressional Budget Office,ClimateWire, Reuters)