Legislation in Congress to reduce the country’s greenhouse gas emissions might carry a hefty economic price tag, according to a new analysis released Friday by the U.S. Environmental Protection Agency. But sponsors of the bill, Sen. Joseph Lieberman, I-Conn., and Sen. John Warner, R-Va., said the report actually demonstrates that the country could accomplish the cuts without sacrificing its prosperity.
Even as the costs of addressing climate change sparked discussion, there were new signs global warming itself could prove economically destructive. Earlier in the week, another government study suggested potentially dire consequences from unchecked climate change on the nation's Gulf Coast, a vital part of the nation's shipping and petroleum infrastructure.
EPA's forecasts covered a variety of possible impacts. The agency predicted the economy might feel a drag on growth of less than 1 percent by 2030, but that the punch could also be nearly four times as strong. Among the "many uncertainties" it cited were the availability of new technologies and what other countries do regarding climate change.
The EPA’s report followed by a day another set of estimates – this one prepared by the National Association of Manufacturers and the American Council for Capital Formation – showing the bill dragging on the economy to the tune of millions of fewer jobs and slowing the growth of the gross domestic product (see press release). The Environmental Defense Fund, an environmental group, immediately attacked the business groups’ findings, noting they did not analyze the costs of doing nothing to stop climate change.
Environmentalists were more split on the EPA study, however, with Environmental Defense saying it showed the economy could grow substantially while controlling emissions, and the Natural Resources Defense Council accusing the agency of hiding the key conclusions that demonstrated emissions reductions are affordable.
Under the Lieberman-Warner bill, known as the Climate Security Act, greenhouse emissions from major economic sectors, including electric power, transportation, manufacturing and natural gas would be capped and gradually reduced. It also would establish a trading program for emissions credits. Backers of the legislation have estimated it would reduce emissions by as much as 66 percent from 2005 levels by 2050. The full Senate is expected to take up the bill, which some environmental groups want to strengthen, in June.
The EPA report also did not discuss the economic benefits of reducing emissions. But the other newly released government analysis suggested those could be substantial. The study prepared by the U.S. Climate Change Science Program and the U.S. Department of Transportation and made public earlier in the week (see press release here) predicted global warming could pose huge threats to the Gulf Coast region. Those included increased intensity of hurricanes, sea level increases of up to seven feet, endangering roads and other infrastructure and the inundation of a “vast portion” of the coast from Houston, Texas, to Mobile, Alabama. One group said the government appeared to be trying to release the report in a way to minimize public notice. The report noted that about two-thirds of the nation's oil imports pass through the region, and that it is home to the largest concentration of freight-handling ports in the country. It painted the threat to the region's transportation network in stark terms:
"Warming temperatures are likely to increase the costs of transportation construction, maintenance, and operations. More frequent extreme precipitation events may disrupt transportation networks with flooding and visibility problems. Relative sea level rise will make much of the existing infrastructure more prone to frequent or permanent inundation – 27 percent of the major roads, 9 percent of the rail lines, and 72 percent of the ports are built on land at or below 122 cm (4 feet) in elevation. Increased storm intensity may lead to increased service disruption and infrastructure damage: More than half of the area’s major highways (64 percent of Interstates; 57 percent of arterials), almost half of the rail miles, 29 airports, and virtually all of the ports are below 7 m (23 feet) in elevation and subject to flooding and possible damage due to hurricane storm surge."
The EPA's analysis of the climate change bill, which also did not factor in last year’s energy conservation legislation that, among other things, required better gas mileage in cars, some impacts were potentially more significant than the business groups’ figures showed. The EPA compared a variety of scenarios to a baseline that assumed compliance with existing domestic and international policies but no new ones after 2007.
According to the EPA, by 2030, the Liberman-Warner bill could reduce the nation’s GDP by as little as less than 1 percent to as much as nearly 4 percent, or $983 billion, compared to what it would be otherwise. The business groups’ report showed a maximum impact of about 2.7 percent by 2030.
On the other hand, the EPA report also predicted there might be no flight of emissions to other countries, known as “leakage,” as energy prices rise. It also predicts that the use of fossil fuels might peak as soon as 2010, followed by a slow decline to 2050. It also shows renewable sources, such as wind and solar, playing a “significant role” if the bill were enacted. Among other highlights of the report, which were also outlined in a letter to Lieberman from Robert J. Meyers, the EPA’s principal deputy assistant administrator, the bill could reduce emissions by up to 56 percent by 2050, a slightly lower estimate than that put forward by the legislation’s sponsors, and it cites the electricity sector as providing the greatest source of emissions reductions. The report also suggested that technology to capture and store carbon could deploy by as early as 2020.
Meyers' letter also promised that the EPA would issue a revised analysis in May or June, showing the effect of the new energy law.
In a joint statement responding to the EPA’s analysis, the senators focused on findings under certain scenarios studied by the EPA that they said showed the economy would grow almost as fast with the legislation in place as without it, that greenhouse emissions would not be shifted abroad, and that that other benefits would occur, such as driving natural gas out of the electricity sector, to the benefit of manufacturers who use gas.
“EPA’s detailed analysis indicates that the U.S. can curb global warming without sacrificing economic prosperity,” Lieberman said in the statement. “We will examine the results closely for improvements that they might suggest for the bill.”
Warner said the results also indicated that greenhouse gases could be controlled “in a manner that leaves the economy whole and is not burdensome on consumers.”
(Wikipedia Photo: Hurricane Katrina damage to New Orleans)
A new federal economic analysis of the 
Even during a period of scary economic headlines, some experts see efforts to control climate change through market mechanisms as a green light at the end of a dark tunnel.