Global Warming Policies’ Economic Chill

By MARGO THORNING | Posted Thursday, June 12, 2008 4:20 PM PT

Many Americans think that switching to energy-efficient light bulbs, buying environmentally friendly appliances and obeying a (100% recycled) bag of green living tips will be the extent of their contribution to curbing greenhouse gases. But the price tag to consumers could be a lot higher if some politicians have their way. In fact, U.S. households could expect a $2,900 annual hit to their family budget sooner than they think.

That’s just one figure causing concern as politicians race to address global warming. Therefore, it’s worth noting that at the same time Americans are concerned about climate change, they are also very concerned about the sluggish economy and the impact it is having on the pocketbook. It is only fair, then, to view the two issues side by side. When cooler heads prevail, the reality is clear:

There is weak public support for global-warming policies, which would end up costing the average family thousands of dollars.

First, it’s worth noting where Americans currently stand on global warming. According to Gallup, as much as 70% of the public during the late 1990s through 2000 said the environment should take priority over the economy. That number has dropped to just 49% this year.

Perhaps even more startling for some policymakers may be that “the environment barely registers as a top-of-mind concern” for the public when asked to name the nation’s biggest problem, according to Gallup’s research. Though the environment tops the list of problems Americans perceive for 25 years in the future, it still lags behind the economy and energy when taken together.

Even then, a poll from the Institute for Energy Research found that only 1 in 4 people citing the environment as their top concern rate global warming as the most serious threat.

None of this suggests the environment isn’t a concern, or that Americans are not concerned. The onslaught of scary warnings on global warming has worn down voters. Thus, many will tentatively agree when politicians ask them to support the cause. After all, a lot of people think, what’s wrong with kicking in a few bucks if it means a cleaner world?

Unfortunately, politicians are not asking for a few bucks. They’re asking that everyone give until it hurts, and then give some more.

Take, for instance, America’s Climate Security Act of 2007, sponsored by Sens. Joe Lieberman and John Warner. The climate would become more secure, they say, by thrusting rigid emissions rules on American business in a cap-and-trade system they liken to the free market at work.

(We are all too well aware of the “efficiency” big-government bureaucracy brings to an issue).

While the act would impose Uncle Sam further into our economy, the economic lives of average Americans would become far less secure. By requiring cuts in greenhouse gas emissions, the bill would increase energy costs ranging from gasoline to electricity. Those costs are just the beginning. Higher prices mean less economic activity, which will drag on job creation nationwide, further slowing the economy.

Those costs will hit home, literally. A joint analysis undertaken by the National Association of Manufacturers and the American Council for Capital Formation concluded that passage of the Lieberman-Warner bill, which was recently killed in the Senate but could return under another name, would have caused significant economic hardship. American households would have faced income losses of as much as $2,927 per year in just a dozen years, and as much as $6,752 per year in 2030. Job losses would have ranged from 1.2 million to 1.8 million in just 12 years and by as much as 4 million by 2030.

Additional research undertaken by the Heritage Foundation confirms these concerns. That organization found that under the Lieberman-Warner scheme, the average household would pay $467 more each year for its natural gas and electricity. Heritage says the average household will spend an additional $8,870 to purchase household energy over the 2012-30 period.

No one is asking politicians to be economists. But economists are telling politicians what they should already know: Government interference with our economy can have a very high price tag for working families.

Even if politicians don’t like to look at economic data on the cost of the Lieberman-Warner bill, polling figures are already equally revealing. Lawmakers can choose to heed those facts now, or they may have to face some tough polling information of their own when their constituents start getting higher energy bills.

Thorning is senior vice president and chief economist of the American Council for Capital Formation.

 

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One response to “Global Warming Policies’ Economic Chill

  1. Few if any economists or financial architects in government exhibit any where near the worry or troubled lines of anxiety over the national economy as they should be, given the reported state of our financial affairs.

    If reading body language means anything, they are far too remote to care, or haven’t sufficiently grasped the reality of what the republic is going through. In either case, it tends to provide evidence that none has the solution to America’s problem, and that crisis of confidence is exhibited well by most public journalists.

    This is the functional equivalent of following the Pied Piper into oblivion by most rational human beings.

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