Transcript - Global Warming Briefing | |
| June 13, 1997 Global Warming - Program Agenda - click here | |
BURNETT |
That's something to think about, I think we all agree. Having heard about the protential impacts on labor of the proposed treaty is is incumbent upon us to discuss the probable impacts on, you and I, the consumer. Here with us today to discuss this issue is Frances B. Smith. I've known Fran Smith since my days with CEI and all of her friends call her Fran. She is executive director of the nonprofit, nonpartisan free market consumer organization, Consumer Alert. Consumer Alert's mission is to enhance the understanding and appreciation of the consumer benefits of the market economy, particularly how individuals voluntarily interacting in the market produce new technologies and increased knowledge that improves consumer health, safety and welfare. Ms. Smith and Consumer Alert also promote the use of the best scientific and economic data to informed policy decisions. On behalf of Consumer Alert, Ms. Smith has testified before numerous congressional committees and federal regulatory agencies on the effects of policy initiatives that affect consumers. In addition, Ms. Smith is a regular guest columnist in Consumer Research Magazine. I now present Fran Smith. |
FRAN SMITH |
Thank you. [adjusts microphone] Good morning. You're going to hear a different way of looking at the global climate change issue. I'm pleased to be here today to talk about this issue, the impact on consumers of global climate change policies. I want you to realize that the effects on consumers will be real, substantial, and very painful. We've just seen what some of the job implications could be, but we're not just talking about jobs. Essentially, I think all of us have to be concerned about global warming policies, not just because they're going to be costly. We hear about money, and the cost of this, and cost benefit analysis and such, but we all know we're a rich country. If money were the only issue, we could do, and we have done lots of foolish things with money. It's about the human consequences of global climate change policies, including the most vulnerable people in America, and I would offer, around the world. We're not just talking about developed countries. We're going to suffer painfully. My point is also that developing countries, if brought into this treaty, would be forced into, I think, a future of poverty that they'd never climb out of. So I would like to put that on record with reference to the former speaker. In my comments, I'm going to sketch for you what some columnists predict will be this impact on consumers if the treaty and the proposals to implement it go into effect. As we've heard, the proposals being discussed would sharply reduce greenhouse gas emissions to 1990 levels or below that in seven to twelve years -- we're hearing 2005, 2010 as some of the target dates. But again, we don't know yet what these proposals are stating. They're just being shifted around and discussed right now. Now, these massive changes won't come about by minor reductions in people's energy use. People won't be just turning up their air conditioners to 72 degrees instead of 70, and changing their 75 watt lightbulbs to 60 watts. Instead, there are going to be drastic reductions in their use of energy, and that's going to affect them in their everyday lives. According to several economic consulting firms -- Charles River Associates, DRI McGraw-Hill, it could result, some of the proposals, in 60 cents per gallon tax on gas or a more than 50 percent increase in the price of gas, and I think what's most important to remember is that most fuels used by residential customers would also increase 50 percent or more. Now, some of these broad approaches discussed to reduce emissions are a carbon tax. That's been kind of pushed aside in favor of what's currently discussed, an emissions trading system. The administration is very likely to back away from energy taxes. First of all, their impacts are too obvious and their costs are too visible. But shifting from visible taxes to hidden regulatory quotas gains us nothing. A colleague recently described a possible international quota system in this graphic way: a transfer of wealth from the poor in rich countries to the rich in poor countries. Any plan that makes energy less abundant will significantly lower living standards. Higher energy costs in the dimension I just described could mean increased costs of heating and air conditioning, transportation, housing, food, and consumer products. After all, the products have to be manufactured, they have to be delivered, they have to be borne on trucks or on other energy user transportation mode. So the point I want to make very strongly is that global warming policies would not simply change our lifestyle; they'd drastically change our standard of living. And all consumers will bear the brunt of what I think is a hasty action. But we also have to look at the particularly vulnerable groups in our society. Those include the poor, people on fixed income, those living in rural areas, and those employed in energy reliant industries. A recent Department of Energy report that was not distributed, that was not released, that was leaked noted that six major industries in the country would be "devastated." That is going to mean a massive loss of jobs, as we saw. Some of the costs, however, aren't that obvious. I'll point to how impacts will be lethal and inequitable, hurting the poor the hardest. One very popular type of approach proposal, this is a way we can reduce some of the carbon dioxide emissions, is to raise the corporate average fuel economy (CAFE) standard from its current 27.5 miles per gallon to 40-45 miles per gallon. This proposal, we'd be told, is good for the environment and good for consumers. But let's look at some of the implications of this proposal. Smaller cars are the inevitable result of energy reduction mandates. They're not only less comfortable, unsuitable for larger families; most importantly, they are less safe -- radically less safe. The human cost of CAFE standards or for average fuel economy standards is already high. CAFE's tragic and disguised blood for oil tradeoff has gone on far too long. To meet the current standard of 27.5, cars have steadily been downsized in size and weight. In the last 20 years, CAFE has caused about a 500-pound drop in the average weight of cars, and it has made cars less safe. According to a 1989 Harvard-Brookings study, the current CAFE standard, because of its downsizing effects, causes about a 14-27 percent increase in traffic deaths per year. Now, for 1996 that translates into 2,700-4,700 people killed because of CAFE. If the standard were raised to 40 miles an hour, a 1992 study by John Graham of Harvard saidethat there would be an additional 5.5 percent increase in highway deaths, resulting in a total of 3,800- 5,800 fatalities. This is not just something that's made up. It's something that has been cited. Large cars are much safer than small cars. The National Highway Traffic Safety Administration, in the Department of Transportation has stated this throughout their literature, so the point being that higher CAFE standards at that level would have a lethal effect on thousands of motorists each year. It's not good for the environment, and it's not good for consumers. And I want to talk about the climate change policies and their inequitable impacts on individuals and families. We're going to see arbitrary gains and losses outside of people's control. Those who live in areas dependent on coal to produce electricity, for example, will find very, very sharp increases in their electricity bill. People who live in large states with less dense populations and depend on automobiles would be harder hit by high gasoline taxes. People who live in older, drafty homes and own older appliances would pay significantly more in energy costs than those in newer homes. And we have to look at people on fixed incomes, senior citizens especially, and they might not be able to afford the steep increases in utility bills, and they may suffer severe health effects as they cut back on heating and air conditioning. We have seen some of that over the past summers in places like Chicago. Climate change policies also not only will have an effect on vulnerable groups, but it will worsen the distribution of income in the U.S. by falling most heavily on the poor. Dr. Gary Yeo, who is a professor of economics at Wesleyan University, made this point in the fall 1996 panel discussion and paper delivered at a conference sponsored by the American Council for Capital Formation. Carbon taxes would cause relatively large income losses, particularly in the poorest one-fifth of the population. They're going to be the ones most damaged. What's disturbing to me as a consumer advocate in learning about some of these effects is that as we've heard, no administration officials or policy makers are discussing that impact. We've heard nothing since 1992. The American people deserve more information, more analysis, and more justification for these drastic measures for a much clearer picture of what the risks are of global warming. Instead they're being fed some scare stories. Global warming is causing unseasonably cool temperatures in the East, floods in North Dakota, hurricanes, malaria, diseases. I don't know if all of you have heard about now the disease trace theory of global warming. Not one of those scares, as we've heard, is founded in fact. You've already heard about the hurricane scare that has been debunked. And of course feared malarial outbreaks have much more to do with restrictions on pesticide use than on any other factor. While many of the pro-regulation anti-growth activists have spread these scare stories, the true risk, the drastic consequences of proposals on the American public have largely been ignored. Negotiators and the administration have not disclosed specifics of their proposals, and let's ask ourselves why. I think we can come up with several reasons. First, if the information were made known, they probably fear a citizen's type BTU tax revolt. Second, they realize that the "conclusions" about global warming are inconclusive, that public debate would further expose the shaky science on which their policies are based. Finally, the negotiating process provides them some cover. You can always say that this country had no choice but to agree to proposals put forth by other nations. But I think I see some light beginning to dawn. Some members of Congress are beginning to realize that they're not getting any information -- information on the specific proposals the U.S. is considering, and their expected impact on the American people. Congressman John Dingell recently criticized this process in a speech last week. He said, there are two things wrong with the global climate change treaty approach. The approach is poorly conceived and badly executed. I would add my affirmation of that. Our negotiators, though, are marching us steadily along to final agreement in Kyoto, Japan, this December, and my contention is that real people are being treated as expendable pawns in the policy debates. The risks of global warming are speculative. The risks of global warming policies, though, are all too real. Then I'd just like to close with a statement that over 100 scientists who signed the Leipzig Declaration against hasty action on the treaty, and they noted, "In a world in which poverty is the greatest social pollutant, any restriction on energy use that inhibits economic growth should be viewed with great caution." Thank you.
|