Sunday, July 23, 2006

Cost of Stabilizing Carbon Emissions

I had taken a stab at what it would take to make the world carbon neutral a little while back. Looks like others have made similar estimates.

In 2004, for example, the U.S. government's Energy Information Administration analyzed a carbon-cutting plan advanced by Sens. John McCain and Joe Lieberman, which aimed to stabilize greenhouse emissions. The energy administration estimated that reaching this target would cause U.S. GDP to be 0.4 percent less than it would otherwise have been in 2028. Since GDP was projected to grow by 90 percent between the time of the study and that year, this meant that the nation could address climate change and still experience growth of 89.6 percent over the period.

In 2001 the Intergovernmental Panel on Climate Change, the most prestigious authority in the field, carried out a similar exercise . It calculated that stabilizing carbon emissions at an acceptable level -- defined as slightly higher than today's -- would cause world GDP to be 4 percent lower than it would otherwise have been in 2050.
None of those seems particularly high to me. I don't get why people believe a carbon tax would cause serious damage to the economy. If these estimates are close to being correct, the impact to the economy seems pretty minimal, especially considering the costs global warming could bring.

via Washington Post

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