The co-chairs of President Obama’s National Commission on Fiscal Responsibility and Reform, also known as the debt commission or deficit commission, released their recommendations for United States budget policy this week.
Nowhere in their discussion of the prospects for the next generation did they mention the challenge of global warming, nor did they integrate climate policy into their economic suggestions. Brad Johnson opines below:
Leaving the critique of the co-chairs’ proposal itself for others, the plan’s first guiding principle is:
We have a patriotic duty to come together on a plan that will make America better off tomorrow than it is today.
One might naively think that the plan would thus address the generational threat from manmade global warming.
The plan purports to reduce the deficit to sustainable levels by 2015 and balance the budget by 2037. Coincidentally, those dates are not dissimilar to what is needed for a sustainable planet. The Copenhagen Prognosis, prepared by top climate scientists in 2009, indicates that for a good chance (75 percent) of avoiding “major societal and environmental disruptions through the rest of the century and beyond,” “global GHG emissions would almost certainly need to decline extremely rapidly after 2015, and reach essentially zero by midcentury.”
Climate scientists have been warning about the threat of unrestrained fossil fuel pollution for decades, and have more recently worked to establish a clear “budget” for policy makers “” like those on the debt commission “” to work with. Again working with a risk tolerance of a 25 percent chance of catastrophe, the carbon-dioxide budget for 2000-2050 is about one trillion tons, with about 380 billion tons already burned away. Our remaining carbon budget is thus 620 billion tons.
If greenhouse pollution from fossil fuels and ecological degradation continue at their present rate “” without any increase, “we would exhaust the CO2 emission budget by 2024, 2027 or 2039, depending on the probability accepted for exceeding 2°C (respectively 20%, 25% or 50%).”
The International Energy Agency has calculated that inaction in 2009 has increased the cost of climate stabilization by $1 trillion, an amount that will grow each year at a faster rate until we have passed the point of no return. As the changes to our climate system that we’ve already experienced demonstrate, we’ve passed the threshold of safety and security.
Unfortunately, most economic analyses of the climate threat, such as the work by William Nordhaus, are not “qualitatively consistent with the much better established science of climate change” and, like the Stern Review, “have understated the potential costs of climate change.” That is to say, economists like Dale Jorgenson use models that tell them that there would be practically no discernible economic impact from rates of warming that scientists say would cause worldwide ecological collapse.
On the flip side, the debt commission and other economists are ignoring the profound economic benefits of action. An analysis by the Center for Climate Studies finds that instead of slowing the economy, household wealth and jobs will grow faster in a green economy. Carbon limits and efficiency-focused policies would have a net positive employment impact of 2.8 million jobs and expand the economy by $154.7 billion by 2020, while US emissions are cut to 27 percent below 1990 levels “” if standards consonant with our carbon budget are set.
If a hawkish climate budget is adopted, US investment will flow into jobs and, yes, into drawing down both the national debt and the federal trade deficit. About half the trade deficit “” approximately $200 billion “” is oil imports. Estimates for the social cost of carbon “” what economists believe to be the optimum current price for a ton of carbon dioxide “” range from about $20 to $100. The upper range is consonant with the scientific carbon budget of 620 billion tons, as global GDP “” all of which is at stake “” is $61 trillion. An American market at $100 a ton would have a capitalization of $580 billion “” about three times as much as the debt co-chairs recommended cutting from the national budget.
– Brad Johnson, in a WonkRoom cross-post
Related Post:
- The Generational Theft Act of 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2001″¦.
- Would-be climate destroyer Sarah Palin attacks Obama for “generational theft”
Previous in TP Climate Progress
Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga
Another reason Obama needs to ride off into the sunset- is he this uninformed about the extreme dangers we face?- or is it politically not ‘appropriate’ to mention global warming as a financial monster we will fave as nation and society?
This shows Obama’s timidity- and misdirected realities.
Are these economists ignorant, compromised, or both? Even Stern put the cost of inaction at 20% of global GNP, and that was three years ago, before the Hadley, NOAA, and MIT reports came out.
This is a bit off topic, but I clicked on your related post. “The Generational Theft Act of 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2001…” and your challenge to come up with a memorable passage with a five syllable word jumped out at me. For some reason, Nat King Cole (and Natalie Cole) immediately came to mind:
http://www.links2love.com/love_lyrics_41.htm
Decline of the Empire:
http://www.declineoftheempire.com/2010/11/america-is-not-a-serious-enterprise.html#comments
It conmtinues to boggle the mind how people can purp[ort to worry so much about “the future” in terms of debt amd totallyignore “the future” in terms of global warming. At the very least they ought to factor in the continuing high costs of natural disasters and infrastructure needs for the coasts. A carbon tax of some sort much more inclusive than their 15 cent gas tax needs to be fogured in as well.
Very good and thorough article in today’s NY Times on the melting glaciers, their impacts, and lack of adequate funding to study them.
“Climate Debt”
“…also known as the debt commission or deficit commission….”
It’s known as the Catfood Commission because that’s what its victims will be reduced to eating.
Climate protection makes sense. There’s no Liberal air or Conservative air, there’s just air. It’s a shared commons. We’ve successfully protected and managed other shared commons, such as fisheries, habitats, and species, so why can’t we accept that our atmosphere’s climate is a form of commons, too? Garrett Hardin was right.
The Waxman Markey cap and trade bill would reduce emisssions 72% by 2050, according to the World Resources Institute. The UN said ending just fossil fuel subsidies would reduce emissions 18% (1/4 of cap and trade) by 2050. The debt commission did something right when proposing to eliminate all fossil fuel subsidies.
Joe, at least the NYT includes it in their interactive feature. But they got the carbon tax calculation wrong, at least according to my calculations. Here’s the letter I just sent them:
I think your carbon tax calculation is off; you say a carbon tax starting at $23/ton CO2 would raise $40 billion in 2015. But what I think you mean is a tax of $23/ton C, not CO2. A tax of $23/ton C is equivalent to about $6/ton CO2. (They’re off by a factor of 44/12.) See for example FAQ #15 at http://www.carbontax.org/faq/, which says that a tax of $10/ton CO2 (about $0.10 per gallon gas) would generate about $55 billion a year in revenue. Or go back to the primary source, like this one: http://www.epa.gov/climatechange/emissions/co2_human.html. It says U.S. fossil fuel emissions are about 5.6 billion metric tonnes of CO2 (same as Tg), so multiply by $23/ton and you get about $130 billion, not $40 billion. (Again, the factor of 44/12 is connected here.)
This is a common mistake that lots of folks make, so a correction would be great. See a similar problem in an academic paper here: http://www.bepress.com/ev/vol7/iss4/art4/
Regards,
yoram bauman phd
http://www.standupeconomist.com
It is interesting to note that the several hundred billion dollar global, annual fossil fuel subsidy from national governments (see International Energy Agency, 2010) is about equal to global industry profits. This does not sound very economical as policy, especially in light of national security threats, and “threat multipliers,” from the insecurities of fossil-driven climate change that were identified this year by the US Department of Defense (itself highly dependent on fossil fuels).
The long list of US mining-as-energy “fuel” subsidies in the tax code and many other places should be eliminated. They are perverse, that is damaging and uneconomical. Unfortunately, they are also historic policy for much of the past century in the US and will be difficult to dislodge, even though their justification has long passed away. As mentioned (#7), they are one of the greatest barriers to a global clean energy economy, and elimination would even reduce the deficit. That is why they are called perverse, economically speaking.
If we ignore it, it will go away….
We have met the enemy…and he is us. (pogo)
Yes, climate debt. Alos called carbon deficit.
We frequently hear about the financial problems of Social Security, but I often point out to people that Social Security probably has a better guarantee than the earth’s atmosphere.
Change in political climate doesn’t deter TVA coal cuts
http://www.timesfreepress.com/news/2010/nov/15/change-in-political-climate-doesnt-deter-tva-coal/