Time “All But Lying” About Cost of Energy Bill
Reporting for Time, Bryan Walsh writes under the header What the Energy Bill Really Means for CO2 Emissions:
But critics have vastly overstated the likely cost. In fact, they’re all but lying. During the House debate, Republican whip Eric Cantor, using numbers from an American Petroleum Institute study, said that the bill would eventually cost more than $3,000 per family per year … A more reliable study from the nonpartisan Congressional Budget Office forecast that the bill would cost the average U.S. household $175 in higher energy costs annually by 2020…
“All but lying” is a pretty strong statement that demands much more support than the nothing-burger Walsh serves up here. First of all, API is not the only institution that has pegged the cost of cap and trade well above $175. The Heritage Foundation, the Brookings Institute, and MIT have all produced studies showing the cost of cap and trade will be far higher than the CBO suggests.
And about that CBO report… Has Walsh even read it? Particularly footnote three which reads:
The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap.
In other words, the CBO cost report did not analyze the legislation’s impact on the economy. Instead it is a simple accounting revenue raised and spent; it is not an economic analysis of the true opportunity cost of the bill. An honest report would share that little fact with his readers.
Finally Walsh notes that costs would be reduced by widespread allowance of “offsets”. But offsets only reduce the cost of compliance because they don’t require emission reductions – which are difficult and therefore expensive. Instead, they are accounting gimmicks to, e.g., give 80 years of expected tree growth and absorption of CO2, in one year, also ignoring that whenever the tree dies the CO2 is returned to the atmosphere. Which is to say that repeating that “The emissions reductions in the bill can clearly be achieved”, at whatever cost, is all but lying.