NCPA - National Center for Policy Analysis

U.S. Carbon Emission Cuts Will Raise Energy Costs

December 18, 2014

United Nations' countries recently gathered in Lima, Peru, to develop a framework for greenhouse gas reduction. Tom Tanton, senior research fellow at the Reason Foundation, writes that the United States wants other nations to voluntarily reduce their carbon emissions. Already, the United States has pledged in an agreement with China to reduce its emissions by more than 25 percent below 2005 levels by 2025. Moreover, American businesses face increasing numbers of costly environmental regulations. 

China has the highest carbon dioxide emissions in the world, followed by the United States. However, American "emissions intensity" is better than most nations -- the United States uses a much smaller amount of energy than other nations producing a comparable amount of goods. Tanton notes that American companies can produce a dollar of goods using just 30 percent of the energy that Chinese businesses would use to produce a dollar of goods. Thanks to new technologies such as fracking, America's energy efficiency has increased in recent years; in 2013, the United States increased its electricity consumption yet its carbon dioxide emissions were 15 percent below 2005 levels.

Tanton writes that imposing emissions reductions domestically will only hurt the United States. With greater carbon dioxide regulation, domestic energy and production costs will rise, hurting the American economy. Moreover, says Tanton, most other nations will not require similar cuts to their carbon dioxide emissions. As such, energy-intensive businesses may flee overseas, offsetting any benefits from emission reductions in the United States.

Source: Tom Tanton, "To 'Beat' Climate Change, the U.S. Will Pick Up the World's Tab," Real Clear Markets, December 12, 2014. 

 

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