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Is It More Cost Efficient to Reduce Emissions?

Gina-Marie Cheeseman
| Wednesday July 1st, 2009 | 3 Comments

During a debate about the American Climate and Energy Security Act (ACES), which passed last Friday with 219 votes, Rep. Peter Sessions (R-TX) sounded the proverbial alarm about capping carbon. He characterized ACES as the “biggest tax increase in American history.” He cited estimates by the Heritage Foundation that over 4,000 jobs will be lost in his Texas congressional district.
According to a Congressional Budget Office (CBO) report, ACES would cost the average household about $175 a year in higher energy and consumer prices in 2020. However, low income households would see a net benefit of $40. It would also reduce future budget deficits by about $4 billion from 2010 to 2014, and $9 billion from 2010 to 2019.


Daniel Weiss and Andrew Jakabovics of the Center for American Progress said about the CBO analysis:

The lowest-income households would actually gain under the bill. The second-lowest income households would face average daily costs of only 11 cents. And energy efficiency measures alone would save the average household nearly as much money as the pollution reduction programs would cost under this bill.

Robert Repetto, an economics professor at the Yale School of Forestry & Environmental Studies, said months ago, “As Congress prepares to debate new legislation to address the threat of climate change, opponents claim that the costs of adopting the leading proposals would be ruinous to the U.S. economy,” he said. “The world’s leading economists who have studied the issue say that’s wrong. And you can find out for yourself.”
Repetto pointed out that the U.S. economy would continue “growing robustly…even under the most unfavorable assumptions regarding costs.” The U.S. GDP would grow by 2.4 percent a year under “pessimistic assumptions,” and reach $23 trillion by 2030 “even if emissions are reduced by 40 percent.”
Robert Repetto on cutting GHG emissions:

Inaction will cost more
Not reducing GHG emissions carries a hefty price tag. Last year the University of Maryland’s Center for Integrative Environmental Research released reports about the economic costs of climate change on eight states (Colorado, Georgia, Kansas, Illinois, Michigan, Nevada, New Jersey, and Ohio).
Matthias Ruth, who coordinated the research, said: “…climate change will cost billions in the long run and the bottom line will be red. Inaction or delayed action will make the ink run redder.”
“If there’s a single bottom line in all of this research, it’s that delaying action on climate change carries a significant cost,” said Ruth. “State, local and national leaders will save money in the long-run by adopting a proactive approach.”
Another study last year showed that if climate change is not addressed, the total cost would be “as high as 3.6 percent of GDP.” The National Resources Defense Committee (NRDC) study put the cost of just hurricane damage, real estate losses, energy costs, and water costs alone at 1.8 percent of the U.S. GDP, or almost $1.9 trillion annually by 2100.


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  • Anonymous

    solar power and conventional electricity sources will reach a “crossover” point by 2015. In other words, electricity from the sun will be cheaper than electricity from fossil fuels.
    DOE to Provide Up to $17.6 Million for Solar Photovoltaic Technology Development
    WASHINGTON – The U.S. Department of Energy (DOE) today announced up to $17.6 million, subject to annual appropriations, for six early stage photovoltaic (PV) module incubator projects that focus on the initial manufacturing of advanced solar PV technologies. Including the cost share from industry, which will be at least 20 percent, the total research investment is expected to reach up to $35.4 million
    Upon negotiation of their subcontracts through DOE’s National Renewable Energy Laboratory (NREL), six companies will begin their 18-month projects. One company, Skyline Solar, doesn’t want to wait until 2015. Management hopes to achieve grid parity within the next 18 months with its patented High Gain Solar (HGS) system

  • Rob Bryan

    The 4,000 jobs that Rep. Peter Sessions (R-TX) speaks of aren’t lost. They’re just moving to Rep. Jared Polis’ (D-CO) Colorado district (Vestas, Hexcel, Ascent Solar, Entegrity Wind, etc). Sessions’ constituents might want to keep this in mind.

  • http://www.gina-mariecheeseman.com Gina-Marie Cheeseman

    Rob, you are right!