Waxman-Markey and the Economy

When you listen to conservative members of congress denouncing the Waxman-Markey bill’s sure-to-be-devastating impact on the economy, it’s worth keeping this post from Conor Clarke in mind:

Here’s an easy way of visualizing the costs of Waxman-Markey. The chart below shows projected U.S. GDP with and without Waxman-Markey (drawn from the data annex of the EPA’s big estimate). Projected U.S. GDP without the bill is in orange; it’s sitting behind projected GDP with the bill, which is in grey. The visible orange stripe is the difference between the two scenarios:

I don’t think it can be seriously denied that this is a small price to pay to avert a global catastrophe. The problem with Waxman-Markey is that it wouldn’t, on its own, actually avert said catastrophe. But this isn’t a flaw in the bill’s design, it speaks to the global nature of the problem — no one country’s activities can prevent catastrophe, you need coordinated action by all the world’s major economies.

As Conor says “The big question is whether this bill will increase or decrease the chance of such coordination.” I’ve heard some clever people who don’t want to be silly denialists about the threat of climate change, and who don’t want to be silly alarmists about the threat of Waxman-Markey, but who don’t have a self-conception as belonging to the same political coalition as Henry Waxman and Nancy Pelosi attempt to argue that the answer is “decrease.” But I’ve never heard any of the people actually charged with the international negotiations say that. As best I can tell, everyone involved with the Copenhagen process, everyone involved with the U.N., and all the climate negotiators from the major European countries are hoping for something like this bill to pass in order to give the international diplomatic process additional momentum.