COPENHAGEN -- ALL PAIN, NO GAIN
December 9, 2009
Would you spend a lot of your own money on something that would give you and your family very little, if any, benefit? Probably not. Yet this is precisely what the government leaders now meeting in Copenhagen are demanding from their taxpayers, says Richard W. Rahn, a Senior Fellow with the Cato Institute.
With the provisions of the Kyoto Protocol set to expire in 2012, proponents view the meeting in Copenhagen this month as critical to extending and expanding efforts to reduce greenhouse gas emissions. But even if implemented successfully, the new efforts to reduce greenhouse gas emissions will have almost no impact on global warming (cutting predicted future warming by only a fraction of a degree), says Rahn.
And, while it is impossible to predict the cost of any protocol to emerge from Copenhagen right now, there are estimates of costs for the Kyoto Protocol, as well as the Waxman-Markey bill passed in June by the U.S. House that would put in place a cap-and-trade regime aimed at cutting greenhouse gas emissions in the United States:
- The London-based Taxpayers Alliance estimated the cost of complying with Kyoto in Europe to be between $67.8 billion and $170.8 billion through 2008.
- And what did Europe get for these costs? Emissions rose in many European countries between 1997 and 2006, including some signatories of the Kyoto Protocol.
- The Energy Information Administration estimated that compliance costs in the United States would have been $400 billion a year.
- Ironically, emissions fell 3 percent in the United States, which did not ratify the Kyoto Protocol, between 2000 and 2006.
The Waxman-Markey bill, like the companion Senate legislation and the Kyoto Protocol, aims to limit emissions from fossil fuels. The inevitable result is an increase in energy prices and all that entails for the economy, says Rahn:
- A study by the Brookings Institution finds that meeting the Waxman-Markey emissions targets would result in a loss of personal consumption from $1 trillion to $2 trillion.
- Gross domestic product (GDP) would be lower by 2.5 percent by 2050 and there would be 1.7 million fewer jobs.
- The Heritage Foundation estimates the largest GDP losses -- up to $9.4 trillion cumulatively from 2012 to 2035 -- and projects 2.5 million fewer jobs.
Source: Richard W. Rahn, "Copenhagen -- All Pain, No Gain," Cato Institute, December 8, 2009.
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