Study: America can afford cap-and-trade

On the eve of Earth Day, an environmental group released a study that suggests implementing a cap-and-trade program to cut greenhouse gas emissions would not slow the U.S. economy or cost jobs, contradicting a report released recently by a group of manufacturers that oppose a climate change bill.

Reducing greenhouse gas emissions by at least 60 percent before 2050 would only slow U.S. economic growth by 0.03 percent, the study, released by the Environmental Defense Fund (EDF), found. Overall, the economy would continue to grow at an average clip of 3 percent, the report found.

{mosads}The review is actually a compilation of analyses done by governmental agencies like the Environmental Protection Agency and universities like Harvard and the Massachusetts Institute for Technology. EDF looked at five studies in total.

“We didn’t run our own numbers,” said Tony Kreindler, a spokesman for EDF. “We’re saying, ‘If you look at all these models, this is the real deal.’ ”

Manufacturing groups and coal companies have stepped up their lobbying against a bill that would impose a cap-and-trade program, arguing that it would have an enormously detrimental impact on the American economy and cost millions of jobs.

The National Association of Manufacturers and the American Council for Capital Formation estimated in a report released last month that the U.S. economy would lose as many as 1.8 million jobs by 2020 and 4 million by 2030 if a cap-and-trade bill introduced in the Senate were to pass.

Under a cap-and-trade program, companies can make the cuts however they see fit. If a company cuts more than it is required to, it can sell an allowance to a company that exceeds the cap. This is intended to provide an incentive for companies to reduce their emissions.

The Senate is expected to consider such a plan as early as this summer. The Climate Security Act, co-sponsored by Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.), aims to cut greenhouse gas emissions by 66 percent before 2050.

“We think it is a very strong bill and we are looking forward to getting it to the Senate floor,” said Kreindler.

The EDF study predicted a cap-and-trade program would increase home energy bills for the average American family by only a few dollars per month over the next two decades.

The impact on employment would be less than 0.05 percent over the next 20 years, the study predicted.

“We can afford an ambitious climate policy for just pennies on the dollar,” said Nathaniel Keohane, director of economic policy and analysis at EDF, in a press release.

“It’s a small investment that will pay off in cleaner air, new jobs and a safer world. Not acting now just means paying heavier price later as we try to manage the consequences of unchecked climate change.”