NCPA - National Center for Policy Analysis

Energy Information Administration Study: Global Warming Treaty Costs

October 4, 1998

The Energy Department's official forecasting branch has issued an extraordinarily pessimistic forecast of steeply rising energy prices if the U.S. fights global warming by clamping down on fossil fuel emissions. The study assumes that new energy taxes would be imposed to reduce greenhouse gas emissions.

  • The Energy Information Agency predicts gasoline prices of $1.39 to $1.91 a gallon, and electricity price increases of 20 percent to 86 percent by 2010.
  • Natural gas prices would rise significantly and coal prices would soar, the report stated.
  • The country's overall energy consumption would decline by more than 17 percent, while gross national product dropped 4.1 percent by 2010.
  • The study is scheduled to be presented to Congress today at a hearing by the House Science Committee.

Environmental advocates -- who appear to have been caught off guard by the study -- were outraged by the warnings of significant economic disruptions which would result from the Kyoto agreement's stringent requirements. Joseph J. Romm, a former assistant secretary at the Energy Department, called the research "one of the most flawed, biased, intellectually dishonest analyses ever produced by a supposedly unbiased analytical organization."

The chairman of the House Science Committee, Rep. F. James Sensenbrenner (R-Wis.), is a leading critic of the climate change treaty.

Sources: John H. Cushman Jr., "Study Says Emissions Cut Will Raise Fuel Costs," New York Times; and Joby Warrick, "Climate Treaty's Effects Examined," Washington Post, both October 9, 1998.

 

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