NCPA: STUDY SAYS COST-BENEFIT ANALYSIS DOESN'T JUSTIFY GLOBAL WARMING ACCORD
May 19, 1999
Dallas (May 19, 1999) - The United States would have to cut its energy use by one-quarter - the equivalent of stopping all highway, rail, sea and air traffic permanently - to meet the requirements of the Kyoto global warming accord, according to a new study by the National Center for Policy Analysis.
The 1997 accord, which has not yet been ratified by any industrialized nation, would require the United States by 2012 to cut emissions of carbon dioxide (CO2) to 7 percent below 1990 levels. This would be done by reducing the use of fossil fuels such as oil, natural gas and coal.
Proponents of the Kyoto accord believe human-caused emissions of carbon dioxide are contributing to global warming. Opponents disagree or say conclusive evidence is not available.
In economic terms, the study says, the costs of compliance with the accord would be seven times greater than any benefits.
"The costs far outweigh any benefits," said Stephen Brown, the author of the study and a senior economist at the Federal Reserve Bank of Dallas. "This accord promises a lot of pain and very little gain."
According to the study of costs and benefits of the accord:
- Based on mainstream studies of the effects of global warming, the economic benefits of lower energy use justify U.S. reductions in CO2 emissions of only about 14% of that required by the Kyoto accord.
- This means the Kyoto accord would require about seven times more CO2 emission reductions by the United States than is justified by cost-benefit analysis.
- Even under assumptions most favorable to action, cost-benefit calculation can justify less than half the CO2 reductions required by the accord.
"The draconian reductions in energy use would result in lost jobs and a lower standard of living," Brown said. "On balance, living with global warming is cheaper than trying to prevent it."